Washington

Warning: The following opinion is provided for purposes of discussion only. We have not Shepardized™ this opinion, and do not know the subsequent disposition of this case nor whether the effect of the opinion has been overruled or superceded by other law.

Skagit Valley Publishing Co. v. Kajac Inc.,
1997.WA.28 (Wash.App.Div.1 04/14/1997)

Washington Court of Appeals

NO. 35289-0-1

1997.wa.28

April 14, 1997

SKAGIT VALLEY PUBLISHING CO., RESPONDENT,

v.

KAJAC, INC.; APPELLANT, JACK SORGENFREI AND THE MARITAL COMMUNITY COMPOSED OF JACK SORGENFREI AND KATHY SORGENFREI; SAMMAMISH VALLEY PUBLISHING, INC.; COHO REALTY, INC.; DEFENDANTS, WILL KNEDLIK, APPELLANT, AND THE MARITAL COMMUNITY COMPOSED OF WILL KNEDLIK AND JANET BLUMBERG, FORMERLY KNOWN AS JANET KNEDLIK; EASTSIDE POTPOURRI, INC.; COLOR PRINT COMPANY, INC.; PACIFIC OFFSET, INC.; DEFENDANTS, GRAND RAPIDS INVESTMENT TRUST, A WASHINGTON LIMITED PARTNERSHIP, APPELLANT.

Appeal from Superior Court of King County. Docket No: 92-2-27528-7. Date filed: 07/25/94. Judge signing: Hon. Robert J. Wesley.

For Appellants: Will Knedlik, Knedlik & Goddard, 2025 Rose Point Ln, Kirkland, WA 98033.

For Respondent: Michael A. Goldfarb, Rohan Goldfarb & Shapiro, PS 1601 One Union Sq, 600 University St, Seattle, WA 98101-3112. Brian S. Bentcover, 2149 North 61st St, Seattle, WA 98101-3112.

Authored by William W. Baker. Concurring: Faye C. Kennedy, Ann L. Ellington.

The opinion of the court was delivered by: Baker

BAKER, C.J. - Grand Rapids Investment Trust (Grand Rapids) enforced its secured interest by foreclosure, a right established under the Uniform Commercial Code (UCC). Skagit Valley Publishing Company (Skagit) alleges that the act of foreclosure was fraudulent under the Uniform Fraudulent Transfer Act (UFTA). We hold that Skagit's UFTA claim is not time barred and that the extinguishment period began on the date of the alleged fraudulent transfer (the foreclosure) and not upon filing of the underlying UCC financing statements. We decline to apply the extraordinary remedy of laches because Grand Rapids has failed to demonstrate that it has altered its position in such a manner that equity demands barring Skagit's claim.

Grand Rapids asks this court to establish a rule that the UCC provides an absolute safe harbor to creditors who enforce secured debts against defaulting debtors. We decline to adopt such a rule and hold that UCC compliance does not insulate a party from claims under UFTA. While the exercise of UCC rights may operate to cut off third party rights, a secured party is not free to perpetuate fraud in exercising its perfected rights. We decline to address additional arguments raised by Grand Rapids due to the inadequate record on review. We affirm the judgment entered in favor of Skagit.

Because this opinion will not be published, and the parties are familiar with the facts, we proceed without an introductory summary of the facts, including them within our Discussion only as necessary.

Discussion

Statute of Limitations

A fraudulent transfer claim under the "actual intent" fraud provision of UFTA is extinguished unless the action is brought within four years after the transfer was made. *fn1 UFTA defines "transfer" as "every mode, direct or indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting with an asset or an interest in an asset, and includes payment of money, release, lease, and creation of a lien or other encumbrance." *fn2 A transfer is made with respect to an asset, not real property, "when the transfer is so far perfected that a creditor on a simple contract cannot acquire a judicial lien otherwise than under this chapter that is superior to the interest of the transferee". *fn3 If applicable law does not permit the transfer to be perfected under RCW 19.40.061(1), the transfer is made "when it becomes effective between the debtor and the transferee". *fn4

On December 4, 1992, Skagit brought a claim against Grand Rapids under UFTA to set aside, as a fraudulent transfer, a stipulated foreclosure of December 6, 1988. Grand Rapids had foreclosed by stipulated judgment against all the assets of the companies liable on a promissory note held by Skagit. The judgment granted Grand Rapids an immediate and irrevocable foreclosure as to every item of collateral serving as security. The financing statement related to the security interest underlying the foreclosure was initially filed on October 27, 1986, and then renewed, in a broader form, on November 8, 1988. Grand Rapids argues that the limitations period began to run upon the filing of the financing statement and that Skagit's claim is therefore barred. *fn5

Filing a UCC financing statement gives notice to the world that the named parties have entered into a secured transaction covering specific collateral, and invites further inquiry into the transaction. *fn6 In the context of UFTA claims, however, the constructive notice that follows from filing is limited to situations where "the facts upon which the fraud is predicated" are contained in the written instrument placed in the public record. *fn7 Because the financing statements did not contain or disclose the elements of Skagit's fraudulent transfer claim, the limitations period did not begin to run at the time Grand Rapids filed them. *fn8 The transfer attacked by Skagit as fraudulent is the foreclosure that occurred on December 6, 1988, the "disposing of or parting with an asset". *fn9 Skagit does not attack the "creation of a lien or other encumbrance." *fn10 UFTA differs from the repealed UFCA in that the premise under the new Act is that "the value of the interest transferred for security is measured by and thus corresponds exactly to the debt secured." *fn11 Under this premise it is clear that the creation of a security interest by filing a financing statement could not of itself give rise to a claim of actual fraud. A creditor attempting to set aside a transfer as fraudulent under UFTA has no basis for an actual fraud claim until the debtor makes a transfer with "actual intent to hinder, delay, or defraud". *fn12

Grand Rapids also argues that because a judgment lien "relates back to the date of the perfection of the security interest in such collateral", *fn13 any claim related to that security interest must begin to accrue at perfection of the security interest. We reject this argument because it fails to recognize that filing the security interest is not the basis of Skagit's fraudulent transfer claim.

We hold that the extinguishment period began on December 6, 1988, the date of the alleged fraudulent transfer: the foreclosure. Because UFTA applies, and because Skagit filed suit within four years, its fraudulent transfer claim is not barred under RCW 19.40.091(a). *fn14

Laches

The purpose of laches, an extraordinary remedy, is to prevent inJustice and hardship. *fn15 The doctrine should only be applied when a party with known rights fails to take steps to enforce them and the condition of the other party has in good faith become so changed that it cannot be restored to its former state. *fn16 Whether the doctrine applies depends on the inherent equities of the particular case. *fn17 In order to establish laches, the defendant has the burden of proving that:

(1) the plaintiff had knowledge of the facts constituting a cause of action or a reasonable opportunity to discover such facts; (2) there was an unreasonable delay in commencing the action; and (3) there is damage to the defendant resulting from the delay. *fn18

Unless specifically displaced by UFTA, the principles of law and equity, including laches, supplement the Act. *fn19 Laches may operate to preclude a creditor from pursuing a remedy under UFTA even though the statutory period of limitations has not run. *fn20 But the doctrine should not be invoked to bar actions brought within the statutory limitations period unless the defendant has so altered his or her position that it would be inequitable to enforce the claim. *fn21 Grand Rapids fails to establish that it has altered its position in such a manner that it would be inequitable to enforce the claim against it. *fn22 We hold that Skagit's fraudulent transfer claim is not barred by laches or any other equitable doctrine properly raised by Grand Rapids. *fn23

UCC Safe Harbor and UFTA

Grand Rapids argues that Skagit Valley is attempting to use UFTA to destroy the purpose of the UCC, which was designed to allow secured creditors to select various alternative remedies authorized to enforce secured debts against defaulting debtors. Grand Rapids relies on the "safe harbor" provision of the UCC *fn24 to claim that when a secured creditor exercises explicit UCC rights, it is insulated from fraud claims.

Under UFTA, a transfer may be set aside if determined to be either actually or constructively fraudulent. *fn25 A transfer is fraudulent as to a creditor if the debtor made the transfer "with actual intent to hinder, delay, or defraud any creditor of the debtor". *fn26 Constructive fraud is established by proof that the debtor made the transfer "without receiving a reasonably equivalent value in exchange for the transfer". *fn27 The trial court predicated the judgment against Grand Rapids on the actual fraud provision of UFTA. *fn28 UFTA provides defenses to both actual and constructive fraud claims. A transfer is not voidable under the actual fraud provision "against a person who took in good faith and for a reasonably equivalent value". *fn29 A transfer is not voidable under the constructive fraud provision if the transfer results from enforcement of a security interest in compliance with the UCC. *fn30 Grand Rapids' argument fails to distinguish between actual and constructive fraud, and the available defenses. Valid enforcement of a security interest under the UCC is not a defense to an actual fraud claim. *fn31

The defense available to Grand Rapids is that it took both in good faith and for a reasonably equivalent value. *fn32 The only evidence offered by Grand Rapids that it took in good faith is evidence asserting the validity of its conduct under the UCC. Because this defense is not available under a claim of actual fraud, Grand Rapids' attempt to insulate itself from a fraudulent transfer claim fails. Furthermore, Grand Rapids does not explain why a transaction which is conclusively "deemed to be commercially reasonable," *fn33 is necessarily free from a charge that it was undertaken "with actual intent to hinder, delay, or defraud". *fn34 The exercise of UCC rights may operate to cut off third party rights. A secured party, however, is not free to perpetuate fraud in exercising its perfected rights. It is not true, as Grand Rapids appears to argue, that "nothing the secured party may do to collect his debt through the process of the law courts will operate to destroy his security interest vis-a-vis the debtor or to impair its priority over third parties". *fn35 Utilizing a court of law in a fraudulent manner is not insulated from attack.

The fact that Grand Rapids complied with the UCC does not prevent a determination that it had "actual intent to hinder, delay, or defraud any creditor". *fn36 We reject Grand Rapids' argument that UFTA does not apply to the allegedly fraudulent transfer, the foreclosure, and hold that the UCC does not provide an absolute safe harbor for creditors. *fn37

Adequacy of the Record

Grand Rapids has failed to provide this court with an adequate record to review the following issues: whether (1) the trial court improperly denied its request for a jury instruction, (2) the advisory jury was properly instructed on the "actual intent" element of UFTA claim, (3) there is substantial evidence to support the advisory jury's valuation of the secured assets and debts as of the foreclosure date, (4) the trial court erred by failing to join a necessary party, and (5) the trial court erred by failing to award CR 11 sanctions.

Grand Rapids argues that the trial court erred in refusing to give its proposed instruction, and that it was thereby denied the opportunity to present its legal theory to the jury. When reviewing a challenge to jury instructions, the appropriate inquiry is whether the trial court abused its discretion by giving or refusing to give certain instructions. *fn38 Errors of law in jury instructions are reviewed de novo, and an erroneous statement of applicable law is reversible error when it prejudices a party. *fn39 Under the rules of appellate procedure, if the party seeking review intends to urge that the court erred in giving or failing to give an instruction, the party should include in the record all of the instructions given, the relevant instructions proposed, the party's objections to the instructions given, and the court's ruling on the objections. *fn40 Because the record contains no information as to how the jury was instructed on the issues of actual intent and valuation of the secured assets and debts as of the foreclosure date, Grand Rapids has not preserved these issues for review. *fn41 We have rejected Grand Rapids' argument that Skagit's UFTA claim fails because the disputed transfer was undertaken pursuant to specific statutory provisions and thus was protected under the UCC. Therefore, the argument that Grand Rapids was unable to present this legal theory to the jury is without merit. There is no error in rejecting an instruction which incorrectly states the law. *fn42 Grand Rapids also argues that the trial court erred by failing to reject the jury's valuation of assets and debts as erroneous, or alternatively, that Skagit failed to meet its burden at trial, and that the valuation of assets was not proven by substantial evidence. *fn43 Again, the inadequacy of the record prevents this court from reviewing Grand Rapids' arguments. *fn44 We are unable to determine whether the valuation was supported by substantial evidence due to the scant record of what occurred at trial. *fn45 Lastly, Grand Rapids argues that the trial court failed to join a necessary party and failed to award CR 11 sanctions. Grand Rapids did not designate any materials from the case below to create a record on either of these issues, or provide this court with the trial court orders, or Conclusions, related to the issues. There is nothing for this court to review, and thus no basis to reverse the trial court on these issues.

We decline to address all of the foregoing issues raised by Grand Rapids because it has failed to provide an adequate record for review. The party seeking review has the burden of perfecting the record. *fn46 We affirm the judgment entered in favor of Skagit.

We grant Skagit costs on appeal, as the prevailing party, pursuant to RAP 14.

Affirmed.

WE CONCUR:

Faye C. Kennedy

Ann L. Ellington.

Opinion Footnotes

*fn1 RCW 19.40.091(a).

*fn2 RCW 19.40.011(12).

*fn3 RCW 19.40.061(1)(ii).

*fn4 RCW 19.40.061(3).

*fn5 Grand Rapids also argues that the statute of limitations of the repealed Uniform Fraudulent Conveyance Act (UFCA) should apply. Under the UFCA, fraudulent conveyance actions were governed by a general three year statute of limitations for fraud claims. See Western Washington Laborers-Employers Health & Sec. Trust Fund v. Harold Jordan Co., Inc., 52 Wash. App. 387, 390, 760 P.2d 382 (1988). UFTA became effective on July 1, 1988. 1987 Wash. Laws, ch. 44 16. Grand Rapids appears to argue, in error, that since it filed a financing statement prior to the effective date of UFTA, the UFCA limitations period applies.

*fn6 Western Washington, 52 Wash. App. at 391 (holding that general three year fraud statute of limitations under the UFCA began to run when UCC financing statement was filed).

*fn7 Western Washington, 52 Wash. App. at 390-91 (citing Strong v. Clark, 56 Wash. 2d 230, 232, 352 P.2d 183 (1960)). Cases holding that constructive notice follows from placing a document on record generally are cases in which the party either had actual notice or was a subsequent party. Aberdeen Federal Sav. & Loan Ass'n v. Hanson, 58 Wash. App. 773, 777, 794 P.2d 1322 (1990) (citing Kendrick v. Davis, 75 Wash. 2d 456, 464-65, 452 P.2d 222 (1969)) (stating that Strong stands for the proposition that "the recording of an instrument affecting real property is constructive notice to all those who subsequently acquire an interest in the property and have reason to refer to the record").

*fn8 See Aberdeen, 58 Wash. App. at 778 (citing Strong, 56 Wash. 2d at 232) (holding that because the recorded document at issue in the case, a partnership agreement, did not disclose facts establishing the elements of fraudulent conveyance, the document could not have served as constructive notice).

*fn9 RCW 19.40.011(12) (definition of "transfer").

*fn10 RCW 19.40.011(12).

*fn11 7A Uniform Laws Annotated, Uniform Fraudulent Transfer Act, Prefatory Note, at 641.

*fn12 RCW 19.40.041(a)(1). This difference between UFTA and the repealed UFCA supports rejecting Grand Rapids' argument that the Western Washington case, decided under UFCA, supports a rule that the extinguishment period under UFTA begins to accrue when a UCC financing statement is filed.

*fn13 RCW 62A.9-501(5).

*fn14 We also reject Grand Rapids' argument that an "optional" act by secured creditors, the choice to foreclose upon default, must not be allowed to create an infinite amount of repose periods and destroy the certainty established by the UCC. This argument fails for two reasons. First, a valid exercise of the foreclosure option will not give rise to a cause of action unless fraud is alleged. It is the fraudulent nature of the foreclosure, not the mere fact it was utilized by Grand Rapids, that is the basis of the cause of action against it. Second, the fact that UFTA itself exhibits a preference for finality and uniformity does not change the fact that the extinguishment period does not begin upon the filing of documents that do not contain the elements of the plaintiff's claim. See McMaster v. Farmer, 76 Wash. App. 464, 470, 886 P.2d 240 (1994) (referring to UFTA's preference for finality over flexibility).

*fn15 Brost v. L.A.N.D., Inc., 37 Wash. App. 372, 375, 680 P.2d 453 (1984).

*fn16 Brost, 37 Wash. App. at 375-76.

*fn17 Crodle v. Dodge, 99 Wash. 121, 130, 168 P. 986 (1917) (citing Young v. Jones, 72 Wash. 277, 283, 130 P. 90 (1913)).

*fn18 In re Marriage of Sanborn, 55 Wash. App. 124, 127, 777 P.2d 4 (1989) (citing In re Marriage of Watkins, 42 Wash. App. 371, 374, 710 P.2d 819 (1985), review denied, 105 Wash. 2d 1010 (1986)).

*fn19 RCW 19.40.902.

*fn20 7A Uniform Laws Annotated, Uniform Fraudulent Transfer Act, Prefatory Note, at 642.

*fn21 Sanborn, 55 Wash. App. at 128 (action to recover past due maintenance pursuant to a decree of dissolution).

*fn22 See Sanborn, 128 Wash. App. at 128.

*fn23 We also reject Grand Rapids' argument that Skagit is a secured creditor masquerading as an unsecured creditor, and that Skagit had a duty to mitigate its damages by seeking to collect the debt owed to it against the security it obtained. The right to bring a claim under UFTA is not dependent on a creditor's status as secured or unsecured. See RCW 19.40.011(4) (creditor defined as a person who has a claim). Grand Rapids cites an Ohio Court of Appeals opinion in support of its argument that "other equitable defenses," apparently including a duty to mitigate damages, defeat Skagit's claim. This argument is without merit. See Third Nat'l Bank & Trust Co. v. Diamond Sav. & Loan Co., 43 Ohio App. 3d 140, 540 N.E.2d 272 (1987). Equity does not demand barring Skagit's UFTA claim based on an unclear "duty to mitigate".

*fn24 Under the UCC, a Disposition that has been judicially approved "shall conclusively be deemed to be commercially reasonable". RCW 62A.9-507(2).

*fn25 See RCW 19.40.041(a)(1) and (a)(2).

*fn26 RCW 19.40.041(a)(1).

*fn27 RCW 19.40.041(2).

*fn28 Although the order and judgment of the trial court does not specifically declare the basis of its decision, it is clear that the actual fraud provision was utilized. UFTA lists "badges of fraud," or factors to consider in determining actual intent under RCW 19.40.041(a)(1). See RCW 19.40.041(b)(1)-(11). The record is void of any information from which this court could determine how or if the trial court considered any of these factors. The case below was tried to an advisory jury. When this is so, "the trial court must enter findings of fact and Conclusions of law." State v. State Credit Ass'n, Inc., 33 Wash. App. 617, 620, 657 P.2d 327 (1983) (citing CR 52(a)(1)). Failure to do so is reversible error. State Credit Ass'n, 33 Wash. App. at 620 (citing State v. Wood, 68 Wash. 2d 303, 304, 412 P.2d 779 (1966)). It appears that the trial court below did not enter specific findings. In its appeal, however, Grand Rapids has not assigned error to this apparent defect, nor does it specifically challenge factual findings regarding the element of actual intent. Unchallenged factual findings are verities on appeal. State v. Hill, 123 Wash. 2d 641, 644, 870 P.2d 313 (1994) (citing In re Riley v. Rhay, 76 Wash. 2d 32, 33, 454 P.2d 820, cert. denied, 396 U.S. 972, 24 L. Ed. 2d 440, 90 S. Ct. 461 (1969)). The fact that Grand Rapids challenged this apparent error by the trial court in a post-trial document does not overcome its failure to assign error to the issue on appeal. In its brief, Grand Rapids states that it incorporates by reference this post-trial document located at Clerk's Papers 43-72. Grand Rapids' brief is as long as the appellate rules permit (50 pages). RAP 10.4(b). The court has discretionary authority to grant a motion to file an over-length brief. RAP 10.4(b). Because Grand Rapids did not make such a motion, we do not consider Grand Rapids' post-trial document as "incorporated by reference".

*fn29 RCW 19.40.081(a).

*fn30 RCW 19.40.081(e)(2).

*fn31 See RCW 19.40.081(e) (predicating use of the defense under RCW 19.40.041(a)(2) and not under RCW 19.40.041(a)(1)).

*fn32 RCW 19.40.081(a).

*fn33 RCW 62A.9-507(2).

*fn34 RCW 19.40.041(a)(1).

*fn35 Foster v. Knutson, 84 Wash. 2d 538, 547, 527 P.2d 1108 (1974) (citing 2 G. Gilmore, Security Interests in Personal Property 43.7, at 1209-10 (1965)).

*fn36 RCW 19.40.041(a)(1).

*fn37 Grand Rapids also argues, based on the rules of statutory construction, that the general statutory regime governing secured transactions, the UCC, takes priority over potentially conflicting provisions of the more specialized UFTA. Grand Rapids also notes that repeal by implication is not favored. See Bellevue Sch. Dist. No. 405 v. Brazier Constr. Co., 103 Wash. 2d 111, 123, 691 P.2d 178 (1984)); see also RCW 62A.1-104 (construction against implicit repeal). This argument is without merit.

*fn38 Goodman v. Boeing Co., 75 Wash. App. 60, 68, 877 P.2d 703 (1994), aff'd on other grounds, 127 Wash. 2d 401, 899 P.2d 1265 (1995); see also Savage v. State, 72 Wash. App. 483, 492, 864 P.2d 1009 (1994), aff'd in part, rev'd in part on other grounds, 127 Wash. 2d 434 (1995) ("The refusal to give a requested instruction is reviewed for abuse of discretion.").

*fn39 Hue v. Farmboy Spray Co., Inc., 127 Wash. 2d 67, 92, 896 P.2d 682 (1995) (citing State v. Wanrow, 88 Wash. 2d 221, 559 P.2d 548 (1977)).

*fn40 RAP 9.2(b).

*fn41 The only information provided by Grand Rapids as to instruction the advisory jury received is a set of interrogatories that includes an inquiry into Grand Rapids' actual intent. Furthermore, the proposed instructions do not appear in the record, rather they are appended as an exhibit to Grand Rapids' reply brief. This court has stated that appending materials to a brief that do not appear in the record, without indicating this fact to the court, violates the intention of RAP 10.3 that factual statements in briefs must be referenced to the record. Harbison v. Garden Valley Outfitters, Inc., 69 Wash. App. 590, 594-95, 849 P.2d 669 (1993).

*fn42 Kastanis v. Educ. Employees Credit Union, 122 Wash. 2d 483, 499, 859 P.2d 26 (1993), amended on other grounds by 122 Wash. 2d 483, 865 P.2d 507 (1994) (citing Mieske v. Bartell Drug Co., 92 Wash. 2d 40, 46, 593 P.2d 1308 (1979)).

*fn43 In an action for relief against a fraudulent transfer, a creditor may obtain "avoidance of the transfer or obligation to the extent necessary to satisfy the creditor's claim". RCW 19.40.071(a)(1). The creditor may recover judgment for the lesser of "the value of the asset transferred" or the amount necessary to satisfy the creditor's claim. RCW 19.40.081(b). If the judgment is based on the value of the asset transferred, "the judgment must be for an amount equal to the value of the asset at the time of the transfer, subject to adjustment as the equities may require." RCW 19.40.081(c). Grand Rapids appears to argue that the value of the assets transferred, properly evaluated considering "distress value" and the nature of a foreclosure, was less than the amount necessary to satisfy Skagit's claim. Thus, under UFTA, Skagit was only entitled to recover the value of the assets transferred, adjusted "as the equities may require." RCW 19.40.081(c).

*fn44 Grand Rapids claims that Skagit did not offer competent evidence regarding how assets must be valued in the relevant context of a failing business. Citing a recent United States Supreme Court case, Grand Rapids argues that a trial court must consider distress value, and the nature of a foreclosure sale, in valuing assets for UFTA purposes. See BFP v. Resolution Trust Corp., 511 U.S. 531, 114 S. Ct. 1757, 128 L. Ed. 2d 556, reh'g denied, 114 S. Ct. 2771, 129 L. Ed. 2d 884 (1994). The case is distinguishable, in that the valuation at issue was related to a constructive fraud claim under Section 548 of the Bankruptcy Code, and determination of whether the debtor received "less than a reasonably equivalent value in exchange" for the transfer. See BFP, 114 S. Ct. at 1760. The Court concluded that "market value cannot be the criterion of equivalence in the foreclosure-sale context." BFP, 114 S. Ct. at 1761-62. This statement is arguably relevant to the valuation of assets at issue in Grand Rapids' case. Grand Rapids, however, failed to offer any proposed instruction on the valuation issue. Furthermore, in an actual fraud case under UFTA, the court does not engage in the "reasonably equivalent value" analysis. Compare RCW 19.40.041(a)(1) and RCW 19.40.041(a)(2). Grand Rapids also argues that the evidence that was submitted was based on outdated financial statements and speculation by an untrained bookkeeper. The record contains little information regarding the evidence at trial on valuation of the assets. The verbatim report of proceedings designated to this court is limited to cross examination of the bookkeeper that Grand Rapids claims engaged in the speculation resulting in improper jury valuation. Grand Rapids cites to trial exhibits to support its argument that the foreclosed assets had little or no value. In its appellate brief, Grand Rapids included a portion of a trial brief in which it "set out with particularity those key elements" that would have been required to engage in proper valuation of the assets at foreclosure. There is no evidence that Grand Rapids formally sought to instruct the jury on these "key elements." A trial brief in which the party states that the court should instruct the jury on a particular matter does not substitute for a request for proposed instructions, and does not preserve an objection to the trial court's failure to instruct the jury on the matter.

*fn45 The lack of information as to what transpired at trial also prevents this court from addressing Grand Rapids' argument that the trial court failed to limit Skagit's recovery to a sum equal to its pro rata rights as to the foreclosed assets, after adjustment for expenses incurred by Grand Rapids in foreclosing. This argument must be based on the "subject to adjustment as the equities may require" language in RCW 19.40.081(c), though Grand Rapids fails to cite this provision to support the argument that such a limit on Skagit's recovery is warranted under UFTA. Grand Rapids also argues, apparently under this provision, that the judgment improperly grants Skagit the benefit of Grand Rapids' post-foreclosure efforts to improve the value of the assets. This argument is puzzling, in that the purported valuation of the assets was as of the date of foreclosure, and therefore would not include post-foreclosure increases. This court is also unable to consider Grand Rapids' claim that the trial court erred in failing to take these issues from the jury. This court is unable to determine whether "there is [any] evidence or reasonable inferences therefrom which would sustain" the jury verdict. See Davis v. Globe Mach. Mfg. Co., Inc., 102 Wash. 2d 68, 73, 684 P.2d 692 (1984) (considering trial court's grant of motion for a directed verdict in a negligence case). We reject all of these arguments and accept the trial court's valuation of the assets, and the judgment in favor of Skagit.

*fn46 Olmsted v. Mulder, 72 Wash. App. 169, 183, 863 P.2d 1355 (1993), review denied, 123 Wash. 2d 1025, 875 P.2d 635 (1994).

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