                                                                                    COURT OF APPEALS
     IN THE COURT OF APPEALS OF THE STATE OFMAMIINGTON

                                                       DIVISION II                  015 AUG 26       PSI 2: 20
                                                                                   ST
 HERITAGE RESTORATION, INC.,                                                            oE q 9&_VJ GTON
                                                                                   BY
                                             Respondent,                                     0EMUT

           V




 DOUGLAS              RADABAUGH               and   SHIRLEY                    UNPUBLISHED OPINION
 RADABAUGH, husband and wife,




       MELNICK, J. —              Douglas and Shirley Radabaugh appeal after the trial court ordered that

funds held in the      court      registry   should   be disbursed to Heritage Restoration ( Heritage). Heritage


performed work on the Radabaughs' home. After disputes arose, litigation ensued. Pursuant to a


stipulated order, the Radabaughs' insurance company paid the policy proceeds into the court

registry   after   the parties could         not agree   to   whom    the   funds belonged.    The Radabaughs went


through bankruptcy procedures and at the conclusion, Heritage moved the trial court to disburse

the funds to it. The trial court ruled in Heritage' s favor. The Radabaughs argue that the trial court


modified a pre -bankruptcy judgment and circumvented bankruptcy law. Because the trial court' s

order disbursing funds to Heritage did not modify a judgment and because the Radabaughs

presented no evidence the trial court circumvented bankruptcy law, we affirm.

                                                              FACTS


I.         WORI{ ON THE RADABAUGHS' HOME


           Snow and rain damaged the Radabaughs' home. Following the submission of a claim for

damages        with   their insurer, Grange Insurance Association ( Grange),                   the Radabaughs hired


Heritage to restore the interior of their home. The Radabaughs and Heritage entered into a written

contract.      Terms   of   the   contract    included that "` [ Heritage]     will not go   beyond the   general scope
45925 -6 -II



of    the insurance coverage               without approval    of [ the   Radabaughs]"'     and    that "` [ the   Radabaughs


agree] to immediately forward all draws issued as partial or full payment regarding this claim.""

Clerk'       s   Papers ( CP)   at   36.   Additionally, the contract stated that the Radabaughs authorized and

directed Grange to "` pay              [ Heritage] directly and/ or include [ Heritage] on all draws issued as partial

or    full   payment       regarding this     claim."'   CP at 37.


11.              DISPUTE


                 Dissatisfied   with   Heritage'   s work,   the Radabaughs      refused   to pay.    Heritage then filed a


complaint for breach of contract, unjust enrichment, and lien foreclosure against the Radabaughs. 1

The Radabaughs filed counterclaims and sought damages.


III.             INSURANCE PROCEEDS


                 Prior to litigation, Grange issued a two- party check to the Radabaughs and Heritage for

  17, 157. 50:         The Radabaughs sent Heritage the check, endorsed to Heritage, adding the phrase

 payment            in full." CP at 39. Heritage retained the check, but did not cash it. Because the parties


disputed to whom the insurance funds belonged, the parties jointly moved the trial court for an

order        providing that Grange,          a non- party,   deposit $    17, 157. 50 ( funds) into the court registry " by

way     of a check made payable              to ` Thurston   County    Superior Court Clerk'   s   Office."'   CP at 30. The


trial court granted the motion and Grange deposited the funds.


IV.              LITIGATION


                 After a trial, the court found that Heritage substantially completed the work contemplated

by the contract and under a quantum meruit theory ruled that the Radabaughs owed Heritage




 1 Heritage had previously recorded a lien against the Radabaughs' property.


                                                                  11
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    24, 350.   On October 14, 2011, the trial court entered a $ 20, 600 judgment in Heritage' s favor.2

The trial court' s findings of fact, conclusions of law, and judgment did not address ownership of

the funds in the court registry, nor did it release the funds.

           On November 9, 2011, Heritage                    moved     for   release of       the   funds in the   court   registry.   It


argued that the funds " should be released to Heritage in partial satisfaction of its judgment" against

the Radabaughs and that the Radabaughs " legally assigned the funds to Heritage when they signed

the [   c] ontract."    CP at 57, 58.


V,         BANKRUPTCY


           On November 16, 2011, the Radabaughs filed for bankruptcy under chapter 7 of the United
                                         3
States     Bankruptcy        Code.           Pursuant to. 11 U. S. C. §            362, an automatic stay of all judicial

proceedings went            into   effect and notice was        filed     with   the trial   court on    November 17, 2011.           On


November 18, 20.11, Heritage received notice of the bankruptcy as creditors subject to discharge

of the Radabaughs' bankruptcy filing. On February 27, 2012, the United States Bankruptcy Court

granted the Radabaughs               a   discharge   under    11 U. S. C. §      727.4




2 The trial court subtracted repair costs and the value of damage to the Radabaughs' home from
the final judgment amount.


3 Title 11 U.S. C.

4
     The   record      on   appeal       contains only the notice of discharge that specifies "[ t] he discharge
prohibits      any   attempt   to   collect   from the debtor a debt that has been discharged" and "[ t] he chapter
7 discharge      order eliminates a           debtor'   s   legal   obligation     to pay     a    debt that is discharged."    CP at

75.     The record does not contain a schedule of discharged debts. However, in a hearing before the
trial court, the Radabaughs and Heritage both acknowledged that the judgment was discharged in
the bankruptcy.


                                                                      3
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         On May 17, 2012, the bankruptcy Trustee moved to abandon the funds held in the court

registry. The      notice and motion        for   abandonment refers        to the funds       as "[   t] he asset ...   described


on schedule    C   of   the   bankruptcy    schedules as `$     17, 150. 50 check in Thurston Co. Superior Court


registry from insurance         payment      to Radabaugh. "'         CP   at   90.    On June 8, 2012, Heritage filed a


response   to the Trustee'      s motion.         On June 12, 2012, the Trustee withdrew its motion with the


bankruptcy court.

         On December 9, 2013, the Trustee filed                a report    stating, "[      T] here is no property available

for distribution from the        estate over and above        that    exempted        by   law."'   CP at 98.


VI.      HEARING ON MOTION TO DISBURSE FUNDS


         On March 7, 2012, the Radabaughs filed a response to Heritage' s motion for release of the


funds, arguing that the trial court should release the funds to the Radabaughs as the owners of the

funds.   On March 21, 2012, Heritage responded by stating that the funds were already Heritage' s

property because the funds had been legally and equitably assigned before the bankruptcy.

Heritage also argued that the Radabaughs' bankruptcy discharge did not prohibit the trial court

from disbursing the funds to Heritage because Heritage, as the rightful owner of the money, was

not attempting to satisfy the judgment against the Radabaughs.

         During      the      March   30,    2012     trial   court    hearing,       the    Radabaughs         argued that the


bankruptcy' s stay of proceedings was still in effect. The Radabaughs' position was that because

Heritage' s judgment against the Radabaughs " was entirely discharged in the bankruptcy court,"



5 Although on appeal both parties imply that the Radabaughs listed the funds in the court registry
as exempt property in the bankruptcy action, the records before the trial court and us do not
demonstrate whether the Radabaughs actually listed the funds as an exemption and whether the
bankruptcy court treated them as an exemption. At the time the Radabaughs filed for bankruptcy,
the ownership of the funds was in dispute and had not been resolved by the trial court.



                                                                51
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the   funds    were " an asset        that was   abandoned       back to the debtor         post - bankruptcy."         RP ( Mar. 30,


2012)    at    12.    The trial court dismissed the motion without prejudice and asked the parties to


supplement the record regarding the bankruptcy.

VII.         ORDER DISBURSING FUNDS To HERITAGE


             On   January       13, 2014, Heritage        again moved        the trial    court   to   release   the   funds.   At the


February 21 hearing, Heritage agreed that the bankruptcy court discharged the judgment against

the Radabaughs, but it again argued that the Radabaughs legally assigned the funds to Heritage

prior   to   bankruptcy,        and   therefore " the money      was    already Heritage'         s under assignment."          Report


of    Proceedings ( RP) ( Feb. 21, 2014)            at    9.   Heritage argued that because the trial court entered a


judgment for $20, 600 in Heritage' s favor, the funds, which were deposited into the court registry

prior   to the trial and judgment,           belonged to Heritage.            It also argued that the Radabaughs legally

assigned the funds to Heritage under the original contract because the Radabaughs manifested an


intention to assign the funds to Heritage. Alternatively, Heritage argued that the Radabaughs also

equitably assigned the funds to Heritage. The Radabaughs again argued that because the judgment

was     discharged in the         bankruptcy, " it is no longer an operative way [ for Heritage] to get at this

money."        RP ( Feb. 21, 2014) at 12.


             After considering counsels' arguments and the evidence presented, the trial court granted

Heritage'      s motion and released        the funds to Heritage. It             entered a   finding    that "[   a] t no time during

the pendency [ of] the Radabaughs' bankruptcy action did the Trustee in that case file any motion

in any court asserting that the Radabaughs held any claim to or an ownership interest in the funds

held in this         court' s   registry   under   this   cause."       CP   at    117.   Thus, the trial court ordered that


 Heritage is the owner of the funds on deposit with the registry of court and is the party entitled to




                                                                    5
45925 -6 -II




the same, because the Radabaughs legally or equitably assigned the funds to Heritage." 6 CP at
118.


           The Radabaughs appeal.'


                                                              ANALYSIS


           The Radabaughs argue that the trial court reformed a judgment discharged in bankruptcy

and improperly disbursed money to Heritage that was being held in the court' s registry pursuant

to a stipulated order. We disagree.


           MOTION TO STRIKE FROM APPELLANT' s BRIEF


           As a preliminary matter, Heritage moves to strike the following factual statements in the

Radabaughs' brief that are unsupported by citations to the record:

           Heritage Restoration received a money judgment against the Radabaughs based on
           Findings of Fact and Conclusions of Law prepared by Heritage Restoration' s Counsel and
            approved and issued by the Trial Court.

           Heritage Restoration filed               a claim   in   bankruptcy       as a creditor of    the Radabaughs.      That

            claim was based entirely on the judgment it had received.

            The Heritage judgment was not paid in full in the bankruptcy.

Br.   of   Resp' t   at   7 ( quoting Br.      of   Appellants     at   4, 5, 9).   Heritage   argues   that "[ o] ne of the above



claims is untrue, one is intentionally misleading, and the other requires further explanation and

context."      Br.   of
                          Resp' t   at   7.   The purpose of rules governing the content of appellate briefs is to

enable us and opposing counsel to review the accuracy of the factual statements made in the briefs.




6 The Radabaughs neither assigned error to nor argued or briefed the issue that Heritage had not
been legally or equitably assigned the funds.

7. The record on appeal does not contain the following items: the bankruptcy petition with attached
schedules, proof of claims, claimed exemptions, or                          documentation regarding the         abandonment.
45925 -6 -II




Litho Color, Inc.             v.   Pac.   Emp' rs   Ins. Co., 98 Wn.         App.   286, 305, 991 P. 2d 638 ( 1999); RAP


10. 3(   a),   10. 4. Because we will not consider any statements unsupported by reference to the record

or    by   citation      of   authority,     we     grant   Heritage'   s   motion.    RAP 10. 3(    a)(   5);   Cowiche Canyon


Conservancy v. Bosley, 118 Wn.2d 801, 809, 828 P. 2d 549 ( 1992).

II.            STANDARD OF REVIEW


               Unchallenged findings          of   fact   are verities on appeal.     Robel   v.   Roundup Corp.,     148 Wn.2d


35, 42, 59 P. 3d 611 ( 2002). " An unchallenged conclusion of law becomes the law of the case."


King Aircraft Sales, Inc. v. Lane, 68 Wn. App. 706, 716, 846 P. 2d 550 ( 1993).

               RAP 10. 3( g) provides that an " appellate court will only review a claimed error which is

included in an assignment of error or clearly disclosed in the associated issue pertaining thereto."

Generally, we will not address issues that a party does not raise appropriately. CalPortland Co. v.

LevelOne Concrete LLC, 180 Wn.                      App.    379, 392, 321 P. 3d 1261 ( 2014).        But where a party' s brief

makes clear what part of the decision below is being challenged, we will overlook the party' s

failure to specifically             assign error    to it. CalPortland Co.,         180 Wn: App. at 392.

               We review the trial court' s decision to disburse the funds held in the court registry for an

abuse of         discretion.       Pac. Nw. Life Ins. Co. v. Turnbull, 51 Wn. App. 692, 699, 754 P. 2d 1262

 1988).         A trial court abuses its discretion when its decision is manifestly unreasonable or' based

on untenable grounds or reasons. Pac. Nw. Life. Ins., 51 Wn. App., at 699.

III.           ORDER To DISBURSE


               A.       Findings of Fact Are Verities on Appeal


               The Radabaughs failed to assign error to any findings of fact as required under RAP

10. 3( g).          Because unchallenged findings of fact are verities on appeal, we treat the following

findings as verities on appeal:




                                                                     7
45925 -6 -II




           At no time during the pendency [ ofJ the Radabaughs' bankruptcy action did the
           Trustee in that case file any motion in any court asserting that the Radabaughs held
           any claim to or an ownership interest in the funds held in this court' s registry under
           this cause.


CP at 117.


           B.         The Radabaughs Failed to Assign Error to the Trial Court' s Order to Disburse


           In this case, the Radabaughs listed assignments of error; however, all of the assignments


of error assert that the trial court either reformed a judgment or circumvented the bankruptcy

court' s order when it disbursed.funds. None assigns error to the disbursal order. The Radabaughs'

arguments misconstrue the trial court' s order. The trial court never reformed Heritage' s judgment.


It merely determined who rightfully owned the funds in the registry. In addition, although the trial

court gave the parties an opportunity to supplement the trial court record with all of the relevant

bankruptcy documents and orders, the record is devoid of any evidence demonstrating the

bankruptcy court exercised control of the funds in the trial court registry.

           There does not appear to be a dispute that the judgment was discharged in bankruptcy;

however, the trial       court   found that Heritage already               owned   the   funds: " Heritage is the owner of


the funds on deposit with the registry of court, and is the party entitled to the same, because the




8 The dissent claims the Radabaughs did assign error to the order to disburse. However, all of the
Radabaughs' assignments of error and issues pertaining to the assignments of error reference either
a judgment modification or a bankruptcy discharge. The Radabaughs claim the trial court modified
the judgment after the bankruptcy court discharged it.      The trial court neither modified the
judgment        nor disbursed money based on a discharged judgment.            None of the Radabaughs'
assignments       of error or issues pertain to the court' s order to disburse the money. Assuming the

Radabaughs have properly assigned error, they have nonetheless failed to brief or argue these
issues     addressed     by   the dissent   and    we      do    not    consider   them.     RAP 10. 3(   a)(   6),   RAP 12. 1;
Avellaneda       v.   State, 167 Wn.    App.   474, 485         n. 5,   273 P. 3d 477 ( 2012);   Wash. Prof'l Real Estate
LLC   v.   Young, 163     Wn.    App.   800, 818   n. 3,   260 P. 2d 991 ( 2011).
45925 -6 -II



                                                                                       9
Radabaughs      legally     or   equitably   assigned     the funds to Heritage."           CP    at   118.    The trial court


disbursed the funds not to satisfy Heritage' s judgment, but because it found Heritage owned the

funds.   And, the trial court had no evidence the funds had been dealt with in the bankruptcy

proceedings or that the funds had been awarded to either party. Therefore, we affirm the trial court

because the assignments of error and issues the Radabaughs raise are inadequate to merit review.

         C.         The Trial Court Did Not Abuse Its Discretion.


         In the event that we misconstrue the Radabaughs argument, we also decide the merits of


the case and hold that the trial court did not abuse its discretion by ordering that the funds belonged

to and should be distributed to Heritage.

         The trial       court "   has the power and responsibility of protecting the fund [ in the court

registry] and of disposing of it in accordance with the applicable principles of law and equity for

the protection- of the litigants and the public whose interests are affected by the final disposition

thereof."     Pac. Nw. Life. Ins.,      51 Wn. App. at 699 ( quoting Wilson v. Henkle, 45 Wn. App. 162,
                            10).
169, 724 P. 2d 1069 ( 1986)               In other words, the trial court only has authority to disburse the

funds within its custody to the party that demonstrates they are entitled to the funds.

         The funds held in the         court   registry   are governed    by   CR 67       and   RCW 4. 44.480-. 500. CR


67 provides:


         In an action in which any part of the relief sought is a judgment for a sum of money
         or   the disposition      of a sum of   money ...     a   party ...   may deposit with the court all
         or   any   part of such sum ... [     which] shall be deposited and withdrawn in accordance
         with the provisions of RCW 4. 44.480 through 4. 44. 500.


9 The Radabaughs do not assign error to the trial court' s determination that Heritage is the owner
of the funds under assignment, nor do the Radabaughs provide any argument on appeal regarding
this issue. See CalPortland Co., 180 Wn. App. at 392.


to
     Superseded     by   statute on other grounds as stated         in Ferguson Firm, PLLC              v.    Teller & Assocs.,
PLLC, 178 Wn.            App.    622, 632, 316 P. 3d 509 ( 2013), review denied sub nom. Ferguson Firm,
PLLC v. Waid, 180 Wn.2d 1025, 328 P. 3d 903 ( 2014).


                                                               9
45925 -6 -II




Once the Rinds are deposited with the court, they are " subject to the further direction of the court"

and " shall not be loaned out, unless, with the consent of all the parties having an interest in, or

making          claim   to the     same."    RCW 4. 44. 480, . 500.             Funds deposited in the court registry are held

in custodia legis. See Maybee v. Machart, 110 Wn.2d 902, 904, 757 P. 2d 967 ( 1988).


            Here, the parties could not agree to whom the funds belonged and they jointly moved for

an order providing that Grange deposit funds into the court registry " by way of a check made

payable         to ` Thurston      County    Superior Court Clerk'              s   Office."'   CP at 30. It is clear, however, that


the   funds belonged to             either   the Radabaughs           or   Heritage.      There is nothing in the record to show

that the        bankruptcy       court' s actions affected            the funds.        Therefore, after considering evidence at .

trial and in the motions to disburse, the trial court found that Heritage, not the Radabaughs, owned


the funds. The Radabaughs do not challenge this finding. We cannot say the trial court abused its

discretion in disbursing the funds to Heritage. Its decision is neither manifestly unreasonable nor

based on untenable grounds or reasons. See Pac. Nw. Life. Ins., 51 Wn. App. at. 699.

IV.         ATTORNEY FEES


            Heritage        requests      attorney fees      on appeal.         We may award attorney fees to the prevailing

party on appeal if "allowed by statute, rule, or contract and the request is made pursuant to RAP

18. 1(   a)."      Malted Mousse, Inc.           v.    Steinmetz, 150 Wn.2d 518, 535, 79 P. 3d 1154 ( 2003).                         The


contract between Heritage and the Radabaughs provides for reasonable attorney fees and court

costs "[        i] n the   event   this   account     is   referred   to an attorney for         collection."   CP   at   13.   Here, the


Radabaughs' account was referred to an attorney for collection when Heritage filed its complaint.

Thus, as the prevailing party, Heritage is entitled to attorney fees on appeal.




                                                                           10
45925 -6 -II



        We affirm.


        A majority of the panel having determined that this opinion will not be printed in the

Washington Appellate Reports, but will be filed for public record in accordance with RCW


2. 06. 040, it is so ordered.




                                                          Melnick, J.


I concur:




                                s
        Maxa, P. J. O —




                                               11
45925 -6 -II



        LEE, J. (   dissenting) — I respectfully disagree with the majority' s narrow interpretation of

what is required to assign error in a case. Here, the assignments of error and arguments made in


Radabaugh' s briefs clearly show that they challenge the trial court' s order disbursing the funds

that had been    deposited into the registry     of   the   court   to Heritage.   Therefore, the merits of the


appeal should be reached.


        In reaching the merits of the appeal, I also respectfully disagree with the majority and

would hold that the trial court' s conclusion that Heritage " owned" the funds because Radabaugh

legally or equitably assign the funds to Heritage is not supported by any findings of fact.

Therefore, the trial    court erred.   Accordingly, I would reverse and remand for the trial court to

determine which party is rightfully entitled to the funds held in the court registry.

A.      ASSIGNMENTS OF ERROR


        I concur with the majority that RAP 10. 3( g) provides that we will only review a claimed

error which is included in an assignment of error or clearly disclosed in the associated issue

pertaining thereto and will not address issues that a party does not properly raise. Majority at 7. I

also concur with the majority that where a party' s brief makes perfectly clear what part of the

decision below is being challenged, we will overlook the party' s failure to specifically assign error

to it. Majority at 7. I disagree, however, with the majority' s narrow interpretation of Radabaugh' s

assignments of error and      the majority' s   conclusion    that "[ t] he Radabaughs neither assigned error


to nor argued or briefed the issue that Heritage had not been legally or equitably assigned the

funds," that " all of the Radabaughs' assignments of error and issues pertaining to the assignments


of error reference either a    judgment      modification or a       bankruptcy    discharge,"   and   that "[ n] one



assigns error   to the disbursal   order."   Majority at 6, n.6; majority at 8, n.8; majority at 8.




                                                        12
45925 -6 -II




         The majority, relying       on   RAP 10. 3( g), asserts that Radabaugh does not assign error to the


superior court' s    disbursement     order.   Majority    at   8.   However, Radabaugh' s first assignment of


error states:




         The Trial Court Erred in Disbursing Money Held in the Registry of Court to
         Respondent Heritage Restoration based on a Judgment Heritage Restoration had
          Obtained Against the Appellants Radabaugh when the Radabaughs had Filed for
          and Obtained a Bankruptcy. Discharge of Debts, Using one of their Property
          Exemptions to Secure the Money in Court, in a Bankruptcy Proceeding in which
          Heritage Restoration had Filed a Creditor' s Claim Based on Its Judgment.


Br. of Appellant at 2. Radabaugh also indentifies the following "Issues Pertaining to Assignments

ofError":

          3.    Is it proper for a Trial Court to disregard a bankruptcy discharge to pay a
         judgment based on an equitable right to payment of money when the Bankruptcy
          Code at 11 U. S. C. § 101( 5)( 8)( A) & ( B) specifically provides that such equitable

          claims are discharged along with purely legal claims to payment of debt?

          4.     Is it proper for Trial Court to disburse money belonging to a judgment
          debtor in partial payment of a judgment that has been discharged in bankruptcy
          prior to the disbursement?


Br. of Appellant at 3.


          In the opening brief, Radabaugh presented six pages of argument to support the contention

that the trial    court erred   in   disbursing   the   funds held in the    court   registry to Heritage.   These


arguments relate to Radabaugh' s contention that ( 1) Heritage' s claim against Radabaugh is legal,

not equitable;     and   therefore, the trial court exhibited "        an improper use of equitable powers to


provide equitable equivalent of a legal remedy when the legal remedy is sufficient as a matter of

law," ( 2) "   whether conceived legally or equitably, Heritage Restoration' s claim was discharged by

the Radabaugh bankruptcy prior to disbursement of the Radabaugh insurance proceeds held by the

Court,"    and ( 3) the trial court " erred by disbursing exempt money belonging to the Radabaughs,

in   circumvention of    bankruptcy law."       Br. of Appellant at 10, 13, 15



                                                           13
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         We must liberally interpret the appellate rules "to promote justice and facilitate the decision

of cases on     the merits."       RAP 1. 2. "   Cases and issues will not be determined on the basis of


compliance or noncompliance" with the appellate rules, except in compelling circumstances where

justice demands. Id. Here, there are no compelling circumstances where justice demands refusing

to address the merits of this case. Because we interpret the Rules of Appellate Procedure liberally

 to   promote   justice   and   facilitate the decision   of cases on   the   merits,"   Radabaugh' s lack of precise


language saying " we challenge the court' s disbursement order" should be forgiven because their

briefing as a whole, including the assignments of error and arguments, is based on the argument

that the trial court erred by ordering the funds be released to Heritage.

B.       THE TRIAL COURT' S ORDER RELEASING FUNDS TO HERITAGE


         The majority holds that the trial           court "     disbursed the funds not to satisfy Heritage' s

judgment, but because it found Heritage           owned     the   funds."   Majority at 9. The majority' s opinion

assumes that the trial court' s determination that Heritage owned the funds was correct. I disagree.

         1.        Standard of Review


         As acknowledged by the majority, we review the trial court' s decision to disburse the funds

held in the     court   registry for   an abuse of   discretion.       Majority at 9; Pac. Nw. Life Ins. Co. v.

Turnbull, 51 Wn.        App. 692, 699,     754 P. 2d 1262,     review   denied, 111 Wn.2d 1014 ( 1988). A trial


court abuses its discretion when its decision is manifestly unreasonable or based on untenable

grounds or reasons.        Pac. Nw. Life. Ins.,   51 Wn. App. at 699.

         As also acknowledged by the majority, the trial court only has the authority to disburse

funds held in the court registry to the party that demonstrates they are entitled to the funds.

Majority at 9. Here, the trial court concluded that Heritage was the " owner" of the funds " because




                                                            14
45925 -6 -II



the Radabaughs          legally      or    equitably       assigned   the funds to Heritage."             Clerk' s Papers ( CP) at 124.


In reaching this conclusion, the trial court abused its discretion.

          2.          Heritage' s Claim To The. Funds Was Discharged In Bankruptcy

          Under federal Bankruptcy Code, the commencement of a bankruptcy action " creates an

estate   comprising        all   legal     or equitable      interests     of the    debtor in property." Nw. Wholesale, Inc. v.


PAC Organic Fruit, LLC, 183 Wn. App. 459, 483, 334 P. 3d 63 ( 2014), review granted, 182 Wn.2d

1009 ( 2015);         11 U. S. C. §         541(   a). "     A bankruptcy debtor has an affirmative duty under the

Bankruptcy          Code to disclose         all assets,     including      contingent and unliquidated claims."                 11 U. S. C.


  521( a)( 1)( B); Arkison           v.    Ethan Allen, Inc., 160 Wn.2d 535, 539, 160 P. 3d 13 ( 2007).


          In    a    bankruptcy        action,     the "     bankruptcy trustee is required to marshal assets of the

bankruptcy          debtor   and use        them to pay creditors."             Krueger v. Tippett, 155 Wn. App. 216, 221,

229 P. 3d 866 ( 2010). Under 11 U. S. C. §§                       541 and 542, all property which the debtor owns or may

have     an   interest in becomes            part of       the   bankruptcy         estate.   11 U. S. C. §   541(   a), §   542( a).   This

                                                                      11
includes property in the             possession of others.                 11 U. S. C. § 541(     a), §   542( a)


              Upon the filing of a petition in bankruptcy, a stay issues by operation of law which

prevents the commencement or continuation of any judicial proceeding against the debtor."

Anderson       v.   City   of Seattle, 123 Wn.2d 847, 852                   n. 2,   873 P. 2d 489 ( 1994); 11 U. S. C. § 362( a)( 1).


The stay is superseded by a permanent injunction upon discharge, which prohibits third parties




11 Assets that are " burdensome" or of "inconsequential value" to the estate may be abandoned by
the Trustee.          11 U. S. C. §         554( a).       When the Trustee               abandons   property, "` title reverts to the
bankrupt,      nunc pro          tunc."'     Krueger, 155 Wn.              App.      at   222 ( quoting Mason        v.   C.I.R., 646 F. 2d
1309, 1310 ( 9th Cir. 1980)); Brown v. O' Keefe, 300 U.S. 598, 602- 603, 57 S. Ct. 543, 81 L. Ed.
          Abandonment does not create an interest in or transfer property to a creditor. Krueger,
827 ( 1937).

155 Wn. App. at 222.




                                                                           15
45925 -6 -II



from pursuing the debtor for the discharged debt. 11 U. S. C. § 524( a)( 2). "                   Any attempt to modify

the   permanent    injunction   must   be   made      in   accordance with     federal   bankruptcy law."      Anderson,


123 Wn.2d at 852 n.2.


         Here, the record demonstrates that the bankruptcy trustee filed, then withdrew, its motion

to    abandon    the funds held in the      court    registry.      Thus, the funds most likely was a part of the

bankruptcy estate, but the record before the trial court and this court is insufficient to determine

whether the funds actually became part of the bankruptcy estate.

         A debtor must     identify,   list,   and   notify   creditors.    Herring v.   Texaco, Inc., 161 Wn.2d 189,


196, 165 P. 3d 4 ( 2007) ( citing In           re   Maya Constr. Co., 78 F.3d 1395, 1399 ( 9th Cir. 1996)).


Known creditors are entitled to actual notice before their claims are discharged. City ofNew York

v.   N.Y., New Haven & Hartford R. R., 344 U. S. 293, 296, 73 S. Ct.. 299, 97 L. Ed. 333 ( 1953).


Here, the record indicates that the bankruptcy court sent notice to Heritage as a creditor on

November 18, 2011.          Therefore, Heritage was a known creditor in the bankruptcy action and

received actual notice.



          Pursuant to section 501 of the Bankruptcy Code, creditors may file a proof of claim, which

permits the creditor to share      in distributions           of   the   bankruptcy   estate.   11 U. S. C. § 501(   a).   A


creditor must file a timely proof of claim in order to participate in any recovery. In re Townsend

Farms, Inc., 54 B. R. 8, 9 ( Bankr. D. S. C. 1984). Section 101( 5)( A) provides that a claim is a " right


to    payment,   whether   or not such right         is   reduced    to judgment ... [    or]   equitable."   11 U. S. C. §


101( 5)( A).     Section 101( 5)( B) further provides that a claim is also a " right to an equitable remedy

for breach of performance if such breach gives rise to a right to payment, whether or not such right


to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed,

undisputed, secured, or unsecured."             11 U. S. C. § 101( 5)( B). The term " creditor" means an " entity




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that has a claim against the debtor that arose at the time of or before the order for relief concerning

the debtor."          11 U. S. C. §     101( 10)( A).    Here, the record before the trial court and on appeal is


insufficient to determine whether Heritage filed a timely proof of claim pursuant to section 501

during the bankruptcy action.

            A debtor may remove property from the bankruptcy estate through the exemption process.

11 U. S. C. § 522( b).           The debtor     must   file   a   list   of   property that the debtor   claims as exempt.        11


U. S. C. § 522( l).          Unless a party in interest files an objection to the debtor' s claim of exemptions

within     30 days, the property         claimed as exempt on such                list is deemed   exempt.     11 U. S. C. § 522( l);


In   re   Bush, 346 B. R. 523, 524- 25 ( Bankr. E.D. Wash. 2006) ( citing Taylor                         vs.   Freeland & Kronz,


503 U. S. 638, 643, 112 S. Ct. 1644, 118 L. Ed. 2d 280 ( 1992)).                            Such objection must be filed with


the   bankruptcy            court.   Also, a " debtor retains the right to sell, transfer, encumber, or use any


property that is            exempt."   Deveny    v.   Hadaller, 139 Wn.            App 605, 620,     161 P. 3d 1059 ( 2007); 11


U. S. C. § 522.


            Radabaugh asserts that the funds had been secured to Radabaugh by application of an

exemption in the bankruptcy action. However, this assertion is made without citation to the record.

RAP 10. 3(      a)(   5).     Radabaugh also asserts that the funds were listed as exempt property in the

bankruptcy action. However, the portion of the record to which Radabaugh cites does not support

this assertion. See CP at 98- 99. Heritage argues that Radabaugh " attempted to claim the funds as

one of     their   exemptions        in the   bankruptcy      action."        Br. of Resp' t at 19. However, this assertion is

also made without citation to the record. RAP 10. 3( a)( 5).


            The parties made no argument to the trial court regarding exemption. However, the record

does include the             bankruptcy   trustee' s   notice and motion            for   abandonment.    That motion refers to




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the   funds      as "[    t] he   asset ...        described    on schedule            C   of   the   bankruptcy    schedules."     12 CP at 90.

Given the record before the trial court and on appeal, there is insufficient evidence to determine

whether        the   funds        were exempted           from the     bankruptcy               estate.   The record is also insufficient to


determine           whether       Heritage filed a        timely     objection pursuant                to 11 U. S. C. § 522.



              A bankruptcy discharge releases a debtor from liability on debts and enjoins any creditor's

effort   to    collect a        discharged debt           as a personal        liability        of    the debtor. 11 U. S. C. § 727( b) and §


524( a)( 1), (      a)(   2);   see also   Heilman        v.   Heilman ( In       re   Heilman), 430 B. R. 213, 218 ( B. A.P. 9th Cir.


2010)). Section 524( a) provides that a discharge granted in a bankruptcy case:



               1) voids any judgment at any time obtained, to the extent that such judgment is a
              determination of the personal liability of the debtor with. respect to any debt
              discharged          under section       727...        of this title, whether or not discharge of such debt
              is waived;


               2) operates as an injunction against the commencement or continuation of an
              action, the employment of process, or an act, to collect, recover or offset any such
              debt as a personal liability of the debtor, whether or not discharge of such debt is
              waived.



11 U. S. C. § 524( a).


              Section 727( b)          provides        that,    except      for    non -dischargeable           debts listed in § 523( a),     a




discharge           under §       727( a) discharges            a   debtor from. all debts that               arose   before   bankruptcy.    11


U. S. C. § 727( b);             Beezley       v.   Cal. Land Title Co. ( In                re   Beezley),    994 F. 2d .1433, 1434 ( 9th Cir.


1993).        This discharge occurs regardless of whether, in the instance of a no -asset chapter 7 case,

as was        the   case    here, the debt          was   listed in    a   debtor' s       schedules.      11 U. S. C. § 727( b);   Beezley, 994

F. 2d    at   1434.        The granting of a discharge is effective immediately upon the entry of an order of

discharge. 11 U. S. C. § 727.




12 Schedule C is property claimed as exempt by the debtor.

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          However,          a   discharge in bankruptcy does          not extinguish     the debt itself. 11   U.S. C. § 524( e).


Rather, it     releases a        debtor from    personal     liability for   the debt.    11 U. S. C. § 524( a)( 2).   The debt


still exists and       may be       collected   from any      other   entity that   might   be liable.   11 U. S. C. § 524( e);


Patronite      v.   Beeney ( In     re   Beeney), 142 B. R. 360, 363 ( B. A.P. 9th Cir. 1992).

          Here, the United States Bankruptcy Court granted Radabaugh a discharge under 11 U. S. C.

     727. The parties agreed before the trial court that Heritage' s judgment against Radabaugh was


discharged      by    the   bankruptcy       court.   Therefore, the discharge released Radabaugh from personal


liability on the debt and enjoined Heritage' s effort to collect the debt as a personal liability of

Radabaugh. 11 U. S. C. § 727( b).               Accordingly, the trial court, based on the record before it, abused

its discretion in concluding that Heritage is the owner of the funds.

          3.          There Was No Assignment Of Funds


          The trial court also concluded that Heritage " owned" the funds because Radabaugh legally

or   equitably      assigned       the   funds to Heritage. CP         at   124.   Even accepting the majority' s position

that the trial court' s findings of fact are verities on appeal because Radabaugh did not assign error

to them, there are no findings of fact to support the trial court' s conclusion, and the trial court erred


in concluding that Radabaugh legally or equitably assigned the funds to Heritage.

                      a.        No findings of fact supports the conclusion that Radabaugh legally or equitably
                                assigned the funds to Heritage


          We review de novo whether a trial court' s findings support its conclusions of law. Shelton

Constr.    Grp., LLC v. Haymond, _                    Wn.   App. ,           351 P. 3d 895, 901 ( 2015); Gamboa v. Clark,


183 Wn.2d 38, 44, 348 P. 3d 1214 ( 2015);                    Scott' s Excavating Vancouver, LLC v. Winlock Props.,

LLC, 176 Wn.          App.        335, 342, 308 P. 3d 791 ( 2013), review denied, 179 Wn.2d 1011 ( 2014).


          The only finding that the trial court made with regard to whether Heritage or Radabaugh

was entitled to the funds stated:



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             6.       On October 14, 2011, the Court entered a judgment in favor of Heritage and
             against the Radabaughs for the principal sum of $20, 600. 00, representing the net
             value of materials and services provided and rendered by Heritage to the
             Radabaughs under the contract.


CP     at   123.    The finding that Heritage' s judgment against Radabaugh arising from contract does

not support the trial court' s conclusion that Radabaugh legally or equitably assigned the funds to

Heritage.          Therefore, the trial court erred in concluding that Radabaugh legally or equitably

assigned the funds to Heritage.


                      b.     No legal assignment


             To    create   a valid       and   binding   assignment, "[   n] o particular words of art are required."



Amende        v.   Town ofMorton, 40 Wn.2d 104, 106, 241 P. 2d 445 ( 1952). However, the assignor must


intend to transfer          and     invest property in the assignee.           Carlile   v.   Harbour Homes, Inc., 147 Wn.


App.        193, 208, 194 P. 3d 280 ( 2008),           review granted     in   part,   166 Wn.2d 1015 ( 2009). The intent


to deprive the assignor of control must be clear. Amende, 40 Wn.2d at 106.

             Heritage       argues       that   because the   parties'   original contract for home repairs required


Radabaugh to forward all insurance. proceeds to Heritage, Radabaugh evidenced an intention to

assign the funds held in the court registry to Heritage. The contract included a clause that stated,

     Radabaugh agrees] to immediately forward all draws issued as partial or full payment regarding

this    claim.""     CP     at    36.    Additionally, the contract stated that Radabaugh authorizes and directs

Grange Insurance Association to "`                   pay [ Heritage] directly and/ or include [ Heritage] on all draws

issued       as partial or       full   payment   regarding this   claim."'     CP at 37.


              However, after the trial giving rise to Heritage' s judgment against Radabaugh, the trial

court concluded that Radabaugh' s obligation to pay was never triggered under the contract with

Heritage. That conclusion has never been challenged by any party. Because Radabaugh was not

obligated to pay Heritage under the contract, Radabaugh did not evidence an intention to assign

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the   funds to Heritage.      Furthermore, the stipulated motion and order directing Grange Insurance

Association to deposit the funds into the court registry acknowledged that the parties disputed to

whom      the   funds properly belonged.              Because the parties disputed ownership, of the funds,

Radabaugh could not have assigned to Heritage funds which it did not own. Therefore, Radabaugh


did not assign the funds to Heritage under the parties' original contract.


                   c.   No equitable assignment


          To    accomplish an     equitable      assignment, "      an assignor must have intended to transfer a


present interest in the debt or fund and, pursuant to such intention, must have made an absolute


appropriation of the thing assigned, relinquishing all control or power of revocation over it to the

use of    the assignee."     Mercantile Ins. Co. ofAm. v. Jackson, 40 Wn.2d 233, 236, 242 P. 2d 503

 1952).    An equitable assignment may be accomplished orally or by writing. Mercantile Ins. Co.,

40 Wn.2d at 236. However, the words or transactions must indicate " an intent, on the one side, to

assign, and an     intent,   on   the   other,   to   receive ...    assuming there is a valuable consideration."

Mercantile Ins. Co., 40 Wn. 2d           at   236.    The language utilized and the surrounding circumstances

must " plainly reveal[]      an intent on the part of the assignor to make an actual or constructive transfer


to the   assignee of a present      interest."       Robert Wise    Plumbing & Heating, Inc. v. Alpine Dev. Co.,

72 Wn.2d 172, 178, 432 P. 2d 547 ( 1967).


          Heritage contends that even if the parties' contract is unenforceable, the contract provisions


in which Radabaugh agreed to pay Heritage or authorized Grange Insurance Association to pay

Heritage for work performed still evidence Radabaugh' s intention to equitably assign the funds to

Heritage. Br. of Resp' t at 16. But if Radabaugh never had a duty to pay under the contract, then

Radabaugh never intended to assign the funds to Heritage.




                                                               21
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           In support of its position, Heritage claims that once the funds were deposited in the court


registry, " the     only dispute remaining" was regarding the value of Heritage' s work performed. Br.

of Resp' t at 17. But the record does not support this argument. Because the stipulated motion and

order directing Grange Insurance Association to deposit the funds into the court registry

acknowledged that the parties disputed to whom the funds properly belonged, a dispute regarding

ownership      of   the   funds   remained.       Thus, Radabaugh clearly did not intend to assign the funds to

Heritage because Radabaugh still maintained an ownership claim to the funds.

           The trial court dispersed the funds held in the court registry because " Radabaugh legally

or   equitably    assigned    the      funds to Heritage."         CP    at   118. Because Radabaugh did not assign the


funds to Heritage, Heritage did not own the funds prior to Radabaugh' s bankruptcy action. Thus,

the trial court erred when it determined that Heritage was entitled to the funds because Radabaugh

assigned the funds to Heritage.

           Furthermore, the parties did not agree that the trial court could disburse the funds to

whomever prevailed at             trial,   nor   did   either   party actually    prevail at   trial.   See CP at 29- 30; CP at


47 ("   The Court further rules that the parties have each failed to prevail on their primary claims

        Therefore, there is       no   prevailing party in this litigation."). The judgment did not provide that


Heritage was entitled to the funds. Thus, it does not logically follow that Radabaugh assigned the

funds to Heritage.


           The trial court may only exercise its discretion to disperse funds held in a court registry to

the party entitled to the           funds.       The trial court exercised its discretion on an untenable ground


because its       conclusion       that    Heritage "     owned"     the funds as a result of Radabaugh legally or

equitably assigning the fund to Heritage is not supported by any finding of fact and Heritage was

not entitled to the funds. Therefore, the trial court abused its discretion.




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        C.      ATTORNEY FEES.



        It follows that I disagree with the majority' s award of attorney fees on appeal to Heritage.

Because I would hold that the trial court erred, Heritage is not the prevailing party and would not

be entitled to attorney fees.

        The trial court abused its discretion when it concluded that Heritage " owned" the funds


because Radabaugh legally or equitably assigned the funds to Heritage. Therefore, I would reverse

and remand for the trial court to, determine which party is rightfully entitled to the funds held in

the court registry.




                                                                      Lee, J.




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