                                                                          FILED
                                                                       MARCH 24, 2016
                                                                 In the Office of the Clerk of Court
                                                                WA State Court of Appeals, Division III




            IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
                               DIVISION THREE

In the Matter of the Marriage of              )
                                              )         No. 32791-4-111
TODD M. CHISM,                                )
                                              )
                     Appellant,               )
                                              )
       v.                                     )         UNPUBLISHED OPINION
                                              )
NICOLE C. CHISM,                              )
                                              )
                     Respondent.              )

       SIDDOWAY, C.J. - Todd Chism appeals the property distribution ordered in the

dissolution of his and Nicole Chism's marriage. Specifically, he challenges the trial

court's finding that, at the time of trial, the Chisms owed Ms. Chism's parents, Garry and

Shirley Will, over $220,000 for loans extended to the Chisms in 2000 and 2004. He

argues that the transfers were gifts, or-if loans-were demand obligations whose

collection was time barred by the time of the dissolution trial. He also assigns error to the

court's consideration of what he characterizes as parol evidence from his ex-wife and her

mother.

       We find no error or abuse of discretion and affirm.
No. 32791-4-111
In re Marriage of Chism


                    FACTS AND PROCEDURAL BACKGROUND

       Todd and Nicole Chism were divorced in August 2014 following an 18-year

marriage. Among the community liabilities found by the trial court and included in the

property distribution were two personal loans made by Garry and Shirley Will, Ms.

Chism's parents. One was in the amount of $160,000 and the other was in the amount of

$60,961. The court ordered both liabilities to be paid by Ms. Chism.

       The evidence at trial bearing on the loans consisted of the testimony of Nicole

Chism, Shirley Will, and Todd Chism, and on two writings and a cashier's check.

       Ms. Chism and Ms. Will testified that sometime before October 28, 2000, the

Wills purchased an 11-acre parcel of property in Nine Mile Falls that the Chisms had

identified as a desired home site. According to Ms. Chism, "my father and mother were

gracious enough to loan us the money" by "purchas[ing] the property for us in their

names because we did not have the financial means to do it." Verbatim Report of

Proceedings (VRP) at 21. The Wills purchased the 11-acre parcel for $250,000.

       The Chisms thereafter realized they could not get a building permit unless the

property was in their names, so the Wills quitclaimed four acres of the parcel-the

waterfront acreage, and thereby the most valuable-at an agreed value of $160,000. Ms.

Chism testified that this was "with the anticipation that when we had enough money we

would pay them back." Id. at 21. Ms. Chism testified that there was never any

discussion with her parents that the transfer of the four acres was a gift. Ms. Will

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No. 32791-4-111
In re Marriage of Chism


testified that in transferring the property, she did not intend to make a gift to the Chisms

and that Mr. Chism "assured us the money would be paid back as soon as they were able

to." VRP at 228-29.

       A writing was prepared and signed by the four parties, with the Chisms signing as

"borrower[s]" and the Wills signing as "lender[s]." Ex. R104. It stated:

       THIS AGREEMENT BETWEEN TODD M. CHISM AND NICOLE C.
       CHISM (borrower) AND GARRY A. WILL, SR. AND SHIRLEY A.
       WILL (lender), THOUGH UNNOTARIZED, SHALL BE HELD TO BE
       LEGAL AND BINDING BY ALL CONCERNED PARTIES.

       WE, TODD AND NICOLE CHISM, IN RETURN FOR LOVE AND
       AFFECTION HA VE RECEIVED A QUIT CLAIM DEED TO 4 ACRES
       (PARCEL NO. 5809608) FROM GARRY AND SHIRLEY WILL. THE
       REAL PROPERTY VALUE AT TIME OF SIGNING OF THIS
       AGREEMENT IS DETERMINED TO BE $160,000.00.

       IF THIS PROPERTY IS SOLD, THE BORROWERS AGREE THAT THE
       $160,000.00 LOAN/GIFT SHALL BE REP AID TO LENDER WITH NO
       INTEREST OR PENAL TIES CHARGED OR ACCRUED TO/BY
       EITHER PARTY.

Id.

       Ms. Will testified that the reason for the "loan/gift" reference in the writing was

"[b]ecause I was concerned that if something happened to my husband or myself or both

of us together, I didn't want the property tied up in our estate." VRP at 232-33. Apart

from that contingency, she testified she "expected to be repaid." Id. at 233.

       There was a small, older home located on the Wills' remaining seven acres of the

Nine Mile Falls property that the Chisms managed and rented on the Wills' behalf. The

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No. 32791-4-III
In re Marriage of Chism


Chisms forwarded the $600 a month received in rent until Mr. Chism was arrested on

some criminal charges (later dismissed) and, according to Ms. Will, "they were having a

lot of financial difficulties since he wasn't working" at the time. VRP at 235.

      Mr. Chism acknowledged the Wills purchased the Nine Mile Falls property and

deeded the four acres to himself and Ms. Chism, but testified that any issue of repayment

"was just kind of lea open." VRP at 72. He testified he fixed up the rental home on the

property and "rent[ ed] that out and gave that $600 a month from rental to the Wills."

VRP at 72-73. He also testified he had "put a lot of money, paid taxes and insurance and

everything" on the rental house. VRP at 76. In response to his lawyer's questioning, he

agreed that the value of the rental house would "more than satisfy" any loan. Id.

       The second loan found by the trial court that Mr. Chism challenges on appeal was

made in November 2004, on investment real estate that the Wills purchased on the South

Hill of Spokane. Mr. Chism had identified the property, explaining at trial that he

became aware of a gentleman who wanted to sell part of his land, so he got involved in

surveying and segregating a parcel that he acquired in "kind of a joint venture" with Mr.

Will. VRP at 108. According to Mr. Chism, Mr. Will "was putting up the front money

and I was going to be involved in the development." Id. Ms. Will testified, similarly,

that she and her husband purchased the property with the understanding that Mr. Chism

would develop it and the couples would split the profit. The purchase cost was

$60,960.82.

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I    No. 32791-4-III

I    In re Marriage of Chism


I           The November 2004 arrangement was also reflected in a writing, which said

II          Garry and Shirley Will agree to loan Todd and Nicole Chism the purchase
            cost of parcel #35262.0128 in the amount of $60,960.82. The original loan
            amount will be repaid at a mutually agreed upon time or when the property
            is sold or transfers ownership. The loan will be without interest but any
            increase in property value from the original purchase price/loan amount
            will be split equally between the parties.

     Ex. Rl 12.

            The witnesses agreed that as a result of a downturn in the real estate market, the

     property had never been developed. Ms. Will testified that she and her husband were still

     waiting to be repaid.

            In 2008, the Washington State Patrol arrested Mr. Chism on charges of child

     pornography, which were later proven false. The Chisms reached a substantial legal

     settlement with the State as a result of the false charges, from which they received $1. 5

     million in or about 2012. Ms. Will acknowledged at the time of the Chisms' dissolution

     trial that she and her husband had not made demand for repayment by the Chisms of the

     two loans at issue following the legal settlement, explaining that "I didn't feel that they

     were in financial condition because of the debt they had accrued during the time that he

     was being investigated." VRP at 243.

            At the time of trial, neither loan had been repaid.

            At the conclusion of a several day bench trial, the trial court found, among other

     matters, that the transfers in 2000 and 2004 were loans that were going to be repaid. It


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No. 32791-4-III
In re Marriage of Chism


assigned them as liabilities to Ms. Chism in distributing the couple's assets. Mr. Chism

appeals.

                                        ANALYSIS

       Mr. Chism challenges the trial court's findings that the transfers were loans that

remained due and owing at the time of the dissolution trial. He also argues that the trial

court improperly considered parol evidence. 1 We first address the parol evidence issue

and then turn to the sufficiency of the evidence to support the trial court's findings, and

whether the findings support the court's conclusions.

           I. The trial court properly considered evidence of negotiations and
             circumstances surrounding the Wills' monetary advances in 2000
              and 2004 and implicitly found that the parties' writings were, at
                                 most, partially integrated

       Mr. Chism argues the trial court improperly considered parol evidence. Ms.

Chism argues we should not entertain that argument for the first time on appeal. Both

parties' arguments proceed from a misunderstanding of the limitation on parol evidence.

       "The so-called 'parol evidence rule' is not a rule of evidence. It is [a] rule of

positive and substantive law." Brother Int'!. Corp. v. Nat'! Vacuum & Sewing Machine

Stores, Inc., 9 Wn. App. 154, 157, 510 P.2d 1162 (1973). It "only applies to a writing



       1
         Mr. Chism also argues that the outcome of this appeal will collaterally estop the
Wills from relitigating whether the advances were enforceable loans because Ms. Will
was in privity with Ms. Chism during the divorce proceedings. Br. of Appellant at 17-20.
Since we affirm the trial court, we need not address the issue.

                                              6
No. 32791-4-III
In re Marriage of Chism


intended by the parties as an 'integration' of their agreement; i.e., a writing intended as a

final expression of the terms of the agreement." Emrich v. Connell, 105 Wn.2d 551, 556,

716 P.2d 863 (1986). A writing may not be integrated at all, in which case parol

evidence is generally admissible. Id. at n.1. Or it may be partially integrated, in which

case terms not included in the writing may be proved by extrinsic evidence insofar as

they are not inconsistent with the written terms. Id. at 556.

       "People have the right to make their agreements partly oral and partly in writing,

or entirely oral or entirely in writing; and it is the court's duty to ascertain from all

relevant, extrinsic evidence, either oral or written, whether the entire agreement has been

incorporated in the writing or not." Barber v. Rochester, 52 Wn.2d 691, 698, 328 P.2d

711 (1958). Accordingly, Ms. Chism's argument that the issue ofparol evidence may not

be raised for the first time on appeal is misplaced. Even if the integration issue was not

argued in the trial court and even if the court's belief about the completeness of the

parties' writings was not explicitly addressed in its findings, the court necessarily decided

whether the agreement was integrated, partially or at all, in order to apply substantive

contract law.

       Whether an agreement is fully or partially integrated is a question of fact. Emrich,

105 Wn.2d at 556. The absence of an integration clause supports a finding that a writing

is only partially integrated. MA. Mortenson Co., Inc. v. Timberline Software Corp., 140

Wn.2d 568, 579-80, 998 P.2d 305 (2000). Since neither of the parties' 2000 or 2004

                                               7
No. 32791-4-111
In re Marriage of Chism


writings contains an integration clause, Mr. Chism's bald assertion on appeal that "the

subject written agreements or putative financial obligations were fully integrated ... on

their face" is utterly lacking in foundation. Br. of Appellant at 2. At a minimum, in order

to determine whether an agreement is integrated, partially or at all, "' the court may

consider evidence of negotiations and circumstances surrounding the formation of the

contract.'" Mortenson, 140 Wn.2d at 579 (quoting Denny's Rests., lnp. v. Sec. Union

Title Co., 71 Wn. App. 194, 202, 859 P.2d 619 (1993)).

       It is Mr. Chism who contends the writings are integrated and who therefore bore

the burden of establishing integration at trial. That being the case, the absence of a

finding of fact on integration is interpreted as a finding against him on that issue.

Ellerman v. Centerpoint Prepress, Inc., 143 Wn.2d 514, 524, 22 P.3d 795 (2001).

Moreover, it is implicit in the trial court's findings that it found the parties' writings to be

partially integrated, at most, because it finds agreement on matters that are not reflected

within the writings' four comers.

       An implicit finding that the writings were at most partially integrated is supported

by substantial evidence. Neither writing contains an integration clause. Both writings

are minimal and appear to have been prepared by laypersons. The parties were close

family members and therefore more likely to be comfortable with a writing that was less

than complete. And, of course, both Ms. Chism and Ms. Will testified to understandings

that are not reflected in the writings.

                                               8
No. 32791-4-III
In re Marriage of Chism


       Given the court's implicit finding that the writings were not fully integrated, it did

not err in relying on the testimony of the parties to fill in the gaps as to the agreements

made in 2000 and 2004.

                  II. Substantial evidence supports the trial court's findings

       To detennine the intent of the parties to a written agreement, courts begin with the

language of the agreement, giving words their ordinary meaning. Hearst Commc 'ns,

Inc., v. Seattle Times Co., 154 Wn.2d 493, 503-04, 115 P.3d 262 (2005). When contract

interpretation does not depend on extrinsic evidence it is a question of law to be reviewed

de novo. Wash. State Major League Baseball Stadium Pub. Facilities Dist. v. Huber,

Hunt & Nichols-Kiewit Constr. Co., 176 Wn.2d 502, 517, 296 P .3d 821 (2013 );

Cosmopolitan Eng'g Grp., Inc. v. Ondeo Degremont, Inc., 159 Wn.2d 292, 298, 149 P.3d

666 (2006). But when a court relies on inferences drawn from extrinsic evidence,

interpretation of a contract is a question of fact. Berg v. Hudesman, 115 Wn.2d 657, 667-

68, 801 P.2d 222 (1990). In that case, the trial court's finding is reviewed for substantial

evidence. Dolan v. King County, 172 Wn.2d 299, 310, 258 P.3d 20 (2011).

       Where the trial court finds the existence of an oral agreement or an agreement that

is partly oral, as in this case, we review whether substantial evidence supports the trial

court's findings of the existence of the oral agreement and its terms. Ban-Co Inv. Co., v.

Loveless, 22 Wn. App. 122, 131-32, 587 P.2d 567 (1978). Substantial evidence means "a

sufficient quantum of evidence in the record to persuade a reasonable person that the

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No. 32791-4-111
In re Marriage of Chism


declared premise is true." Wenatchee Sportsmen Ass 'n v. Chelan County, 141 Wn.2d

169, 176, 4 P.3d 123 (2000).

      The following findings by the trial court are relevant to the issues on appeal:

      6.     The Wills, parents of Ms. Chism, had loaned the community money
             during the course of the marriage on several occasions for business
             arrangements.
      7.     These loans from the Wills were documented and the money was
             paid back to them.
      8.     The Wills loaned $160,000.00 to the community in 2000 and there is
             a writing to evidence that loan.
      9.     This $160,000.00 loan was used to purchase the Walnut Springs
             parcel that the family home was built on.
      10.    The Wills also loaned the community $60,961.00 for the purchase of
             the South Hill lot.
       11.   The Court found the testimony of Ms. Will to be very credible and
             pretty candid.
       12.   The Wills are getting ready for retirement, have about $500,000.00
             in their savings account to live on and are expecting to have this loan
             money repaid.
      13.    The Wills understandably did not demand earlier repayment on these
             two remaining loans as the parties and the grandchildren were going
             through significant financial hard times and emotional turmoil.
      14.    Both the South Hill lot loan and Walnut Springs loan are valid.

Clerk's Papers (CP) at 72. Mr. Chism assigns error to only findings 8 through 14. The

court's findings that the Wills had loaned the Chisms money on several other occasions

that were documented and in which the loans were always repaid are not challenged.

Unchallenged factual findings are verities on appeal. In re Marriage ofRaskob, 183 Wn.

App. 503, 510, 334 P.3d 30 (2014).

                                            10
No. 32791-4-III
In re Marriage of Chism


          Apart from Mr. Chism's mistaken argument that parol evidence was not

admissible, we discern from his briefing only two arguments as to why findings 8

through 14 are unsupported. The first is that "[b]ased upon the manner and wording of

the written documents ... these two (2) separate transfers of funds could easily on their

face be considered outright 'gifts' rather than loans." Br. of Appellant at 13.

          Mr. Chism ignores the indicia "on their face" that the written documents could be

considered loans. The 2000 document identifies the parties as "borrower[ s]" and

"lender[ s]" and states that if the real property is sold, "the borrowers agree that the

$160,000.00 loan/gift shall be repaid to lender." Ex. R104. The 2004 document states

that the Wills "agree to loan" the Chisms $60,960.82, that "the ... loan amount will be

repaid," and that "the loan will be without interest." Ex. Rl 12. The trial court was

entitled to consider other evidence, including Ms. Chism's and Ms. Will's testimony

concerning understandings discussed but not reflected in the writings, the Wills' financial

situation, and the parties' history that monies loaned to the Chisms by the Wills were

repaid.

          As always, "[ c]redibility determinations are for the trier of fact and cannot be

reviewed on appeal." State v. Camarillo, 115 Wn.2d 60, 71, 794 P.2d 850 (1990). The

trial court's findings that the monies advanced were valid loans is supported by

substantial evidence.




                                                11
No. 32791-4-111
In re Marriage of Chism


       Mr. Chism's only other discernible argument is that "there was no deadline for any.

arguable repayment," making the loans "demand notes under long-established

Washington case law" to which he argues a six-year statute of limitation applies. Br. of

Appellant at 13. Generally, actions for breach of written contracts have a six-year

limitations period, RCW 4.16.040. A limitations period begins to run when the claim has

"accrued." RCW 4.16.005. A claim is said to accrue when a party has the right to

enforce the cause of action and seek relief in the courts. Gunnier v. Yakima Heart Ctr.,

Inc., 134 Wn.2d 854, 859, 953 P.2d 1162 (1998). These principles apply to an action on

a demand loan, which is a loan agreement that does not provide for a specific time or

period for repayment. Nilson v. Castle Rock Sch. Dist., 88 Wn. App. 627, 630, 945 P.2d

765 (1997). But cf RCW 62A.3-118(b) (ten-year limitations period applies if the note is

a negotiable instrument and no demand has been made).

       The parties' writings provided for repayment not on demand, but on

contingencies. The October 2000 agreement indicated that the $160,000 would be repaid

"if [the] property is sold." Ex. Rl04. If that were the parties' only agreement, an effort

by the Wills to collect at an earlier time would fail, since the repayment obligation had

not yet accrued-unless the court found that the parties had not intended the debt to be

contingent, but only relied on the future sale as a convenient time for repayment. In that

event, if the future sale did not happen as contemplated, the law would require repayment

to be made within a reasonable time. Noord v. Downs, 51 Wn.2d 611, 614, 320 P.2d 632

                                             12
No. 32791-4-111
In re Marriage of Chism


(1958); and see Annotation, Agreement Postponing Payment of Pre-Existing Debt until

Happening ofSome Specific Contingency Wholly or Partially within Debtor-Promisor's.

Control as Requiring Payment within a Reasonable Time, Even Though the Contingent

Event Has Not Occurred, 148 A.L.R. 1075 (1944). Of course, according to Ms. Chism's

and Ms. Will's testimony, the parties had agreed that "the money would be paid back as

soon as [the Chisms] were able to," and as of the time of trial, that had not yet

happened-or at least, hadn't happened more than six years earlier. VRP at 228-29. The

trial court implicitly found that the contingency for repayment was the Chisms' financial

ability to repay in light of its finding that the Wills did not demand earlier repayment as

"the parties and the grandchildren were going through significant financial hard times and

emotional turmoil." CP at 72, Finding 13.

       The parties' November 2004 agreement, which Mr. Chism himself characterized

as a "joint venture" arrangement, did not call for repayment until "a mutually agreed

upon time or when the property is sold or transfers ownership." Ex. Rl 12. There was no

evidence that any of those contingencies had occurred prior to the time of trial.

       The trial court's conclusion that the loans from the Wills were valid and remained

enforceable is supported by its findings. 2


       2
         We also point out that the trial court could have reached the same conclusion
based on other findings supported by the evidence. First, where a note does not provide a
time for repayment, an exception to construing it as a demand note exists "when, at the
time of contracting, the parties contemplated delay in making the demand and where

                                              13
No. 32791-4-III
In re Marriage of Chism


       Affirmed.

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

Washington Appellate Reports, but it will be filed for public record pursuant to RCW

2.06.040.



                                                   dl~,c?a:--
                                                      c.1:
                                                  Siddoway,

WE CONCUR:




   rsmo,J/




'speedy demand would violate the spirit of the contract.'" Nilson, 88 Wn. App. at 630
(quoting Barer v. Goldberg, 20 Wn. App. 427, 476, 582 P.2d 868 (1978)). Second,
equitable estoppel can be raised to prevent an obligor from relying on the statute of
limitations if the defendant made representations or promises to perform that lulled the
plaintiff into delaying timely action. Peterson v. Groves, 111 Wn. App. 306, 311, 44
P.3d 894 (2002). The existence of a close family relationship has been held to be an
important factor as a basis for reliance. Id. at 311 (citing Allan E. Korpela, Annotation,
Fiduciary or Confidential Relationship As Affecting Estoppel to Plead Statute of
Limitations, 45 A.L.R.3d 630 (1972)).

                                             14
