Opinion
No. 62593-4-I.
November 8, 2010.
Appeal from a judgment of the Superior Court for King County, No. 06-2-04967-5, Bruce E. Heller, J., entered October 2, 2008.
Affirmed by unpublished opinion per Leach, A.C.J., concurred in by Appelwick and Schindler, JJ.
Bryan's One Stop, Inc. (Bryan's One Stop) and Brown Petroleum, LLC (Brown Petroleum) appeal from a judgment granting rescission of a purchase and sale agreement with Chan K. Ho and Hea Ryun Ho and awarding the Hos recovery of payments made under the agreement and attorney fees. Primarily, they challenge the trial court's reliance upon extrinsic evidence to interpret the parties' agreement and the sufficiency of the evidence to support the trial court's findings of fact. Finding no error, we affirm.
Respondents also appealed from this judgment, but their cross appeal was previously dismissed as abandoned.
FACTS
Bryan and Ann Brown were the sole owners of two corporations: Bryan's One Stop and Brown Petroleum. Bryan's One Stop owned a convenience store with four gas pumps in North Bend, Washington. Brown Petroleum owned the land upon which the business operated.
In 2004, Mr. Brown decided to sell the business and the land and retained a real estate agent. At this time, he was advised to obtain an environmental site assessment to determine whether the property was contaminated.
In January 2005, Mr. Brown obtained a Phase II environmental site assessment from Northwest HydroGeo Consultants. This report concluded that both the soil and groundwater were contaminated but did not describe required remediation measures. Because the report was incomplete, it could not be used by any bank considering a loan on the property.
On February 2, 2005, Mr. Brown, on behalf of Bryan's One Stop and Brown Petroleum, executed an exclusive listing agreement with Albert Rosellini and The Fortune Company. The proposed listing price under the agreement was $1,350,000 for both the business and the land.
Rosellini owned The Fortune Company. He was Ms. Brown's uncle.
On March 16, 2005, Mr. and Mrs. Ho, through their wholly owned corporation, Sarawaser Company, made an offer to purchase the business and the land for $1,300,000. This offer was set forth in the "Earnest Money Receipt Purchase Sale Agreement" and "Addendum to Earnest Money Receipt Purchase Sale Agreement" (collectively "first PSA"). The Hos' agent, Bailey Cho, prepared the purchase and sale agreement; Rosellini prepared the addendum.
Cho was also employed by The Fortune Company. He and Rosellini were familiar with the Hos, since Cho had worked with the Hos for several years.
This first PSA provided for payment of the purchase price with a $100,000 promissory note and the balance in cash at closing. Mr. Brown knew that the buyer required a bank loan to close the transaction. A financing provision in this PSA stated, "Buyer agrees to make application for said financing within 15 days of acceptance of this offer and to provide Seller with a written letter of commitment from a lender within 45 days of acceptance of this offer."
The first PSA obligated the seller, if required by the buyer's lender, to obtain an environmental assessment and remediate any disclosed contamination with a provision titled "Environmental Assessment" that provided,
Upon full execution of the Purchase and Sale Agreement, and removal by buyer of financing contingency . . ., Seller shall undertake, at [its] sole expense, a Level I and/or Level II environmental site assessment of the real property being sold hereunder if required by Buyer's Lender. If site assessment indicates the presence of contamination above DOE [Department of Ecology] threshold levels, Seller agrees to remediate site to acceptable levels and obtain a "No Further Action" (NFA) letter from Washington State Department of Ecology.
On March 18, 2005, Mr. Brown, on behalf of Bryan's One Stop and Brown Petroleum, accepted the offer. The closing was scheduled for May 31, 2005.
On March 21, 2005, the Hos applied for a Small Business Administration (SBA) loan through Temecula Valley Bank. The bank requested extensive financial documentation, which the Hos had difficulty gathering. The bank also required a Level II site assessment from Mr. Brown. Mr. Brown did not take any action to obtain this assessment, claiming that he had no funds to pay for it.
The trial court found that Mr. Brown understood that the cleanup would be paid for out of the Hos' loan, meaning that upon closing of the sale, the bank would hold in escrow 150 percent of the estimated clean-up costs. The cleanup would then be paid out of the escrowed funds. Upon completion of the cleanup, the bank would return any unused funds.
Because Mr. Brown did not obtain the Level II assessment and the Hos did not provide their bank with all the required financial information, neither party was prepared to close on May 31, 2005. The first PSA contained an automatic 30-day extension, but the sale did not close by June 30, 2005, either. Instead, the parties continued working toward closing the transaction. Underwriters at Temecula Valley Bank received the Hos' loan application on July 1, 2005. A loan processor spoke with the Hos several times in July and August 2005 regarding the required documentation. On July 7, 2005, The Fortune Company provided a financial analysis of Bryan's One Stop to the bank. Mr. Brown's accountant provided further financial information to the bank on July 14, 2005.
In early August 2005, Rosellini suggested to the parties that they divide the sale into two transactions by closing on the business sale first and then the land sale. Sale of the business would allow the Hos to start operating it to earn income and provide Mr. Brown with funds to pay for the site assessment. The parties agreed to this proposal. Rosellini prepared and the parties signed a second PSA and Addendum (collectively "second PSA") dated August 8, 2005, providing for the sale of the business for $250,000 plus inventory in cash at closing, to be followed by sale of the land. The purchase price for the business, $250,000 plus inventory, was arrived at by using the value discussed between Mr. Brown and his agent in February 2005 when Mr. Brown signed the exclusive listing agreement. The parties agreed that the purchase price for the land would be $1,000,000.
Because the sale of the land was delayed, the second PSA contained a "Premises Lease" provision, stating, "Buyer agrees to enter into a premises lease with a basic rent of $6,000/mo., triple net. Initial lease term extends until the sale of the real estate contemplated below can be consummated, but in no case later than September 1, 2006." The second PSA also contained a provision, titled "Real Estate Purchase," stating,
Seller agrees to sell, and buyer agrees to buy, the underlying real estate at this site on or before September 1, 2006. Seller will use best efforts to remediate any existing contamination above [DOE] threshold levels and to obtain a [NFA] letter from DOE. Buyer agrees to close this transaction prior to complete remediation and receipt of NFA letter provided financing is available and seller indemnifies buyer from any costs, claims, [and] judgments, resulting from contamination that occurred prior to this business sale.
Rosellini later informed Mr. Brown that the Hos were unable to pay $250,000 in cash. Rosellini suggested that the Hos pay $120,000 in cash at closing and pay the balance for the business at a later date. The parties met at The Fortune Company, where Mr. Brown expressed his concerns about this change in plans. The Hos assured Mr. Brown that a relative in Texas would provide additional funds if necessary.
Based on these negotiations, the parties signed a third PSA and Addendum (collectively "third PSA") dated August 29, 2005. The third PSA required the Hos to pay $120,000 in cash at closing, with the balance of $130,000 plus inventory to be paid "pursuant to a secured promissory note calling for one lump sum payment of the full balance including accrued interest of 8% per annum 120 days after closing." No form of note or security instrument was identified in or attached to the agreement. The agreement contained no additional description of the terms of these instruments. The third PSA contained the same "Real Estate Purchase" and "Premises Lease" provisions as the second PSA. Mr. Brown, on behalf of Bryan's One Stop and Brown Petroleum, signed the addendum.
The parties closed on the sale of the business on September 12, 2005. The Hos and Sarawaser paid the cash portion of the purchase price and delivered to Bryan's One Stop their promissory note for $189,473, which included the remaining $130,000 for the business plus $59,473 for inventory, together with a security agreement and a Uniform Commercial Code financing statement. The note stated that it was due on January 12, 2006. This due date was chosen because the parties and their agents believed that Temecula Valley Bank would fund the buyer's loan by that time. At the closing, the buyer also assumed seller's obligations with Fortune Oil Company, which included a "Retailer Agreement," a "Loan Agreement," "Incentive Program Agreement," "Security Agreement," and "Deed of Trust."
The trial court made two significant findings pertinent to the relationship between the promissory note and the land sale:
The buyer intended to pay the promissory note with the proceeds of the land loan. The seller knew that the promissory note was going to be paid out of the land loan. The seller knew that if the buyer did not get the loan, it would be impossible for the buyer to pay for either the land or the promissory note.
. . . .
Prior to the first closing on September 12th, the seller knew that in order for the land loan to close it needed to obtain a Level II site assessment, a cost estimate for the clean up [sic] and needed to sign an indemnity holding the bank and the SBA harmless as a result of the contaminated soil. Both Al Rosellini and Bailey Cho talked to the seller about this. The seller had agreed to do those things and the buyer was justified in relying upon the seller's cooperation with the loan process.
On September 14, 2005, the Hos took possession of the business and began operating it. Mr. Brown trained the Hos and made some repairs over the next two weeks. The Hos also made improvements to the business premises and purchased new equipment.
About one week later, Brown Petroleum executed a letter contract with Associated Environmental Engineers (AEG) to perform a Level I assessment of the property.
On September 23, 2005, the Hos received approval from Temecula Valley Bank for a loan in the amount of $1,040,000. Rosellini and Cho told Mr. Brown about the approval.
According to Mr. Brown, the Hos began complaining around this time that business revenues were less than expected so they could not pay rent on time. Initially, Mr. Brown agreed to accept late rent. When business continued to be slow, the Hos met with Mr. Brown on October 20, 2005. At this meeting, the Hos accused Mr. Brown of misrepresenting the business income and asked for a discount of $150,000. Mr. Brown refused the Hos' request.
On October 24, 2005, AEG completed the Level I assessment. Despite Mr. Brown's knowledge that Temecula Valley Bank required a Level II site assessment, he took no action in November and December 2005 to obtain it. Temecula Valley Bank received AEG's assessment on November 1, 2005. Alex Sadas, an underwriter at the bank, called Mr. Brown that day and informed him that the bank required him to sign an indemnity agreement and to escrow 150 percent of the clean-up costs. Mr. Brown agreed to do both. Sadas made a note of this conversation on the bank's copy of the AEG Level I assessment.
Mr. Brown testified that, in late November 2005, he met twice with the Hos to discuss their financial concerns. The Hos threatened to tender back the business if they did not receive a discount. The parties did not have any further contact before the January 12, 2006, promissory note due date.
On December 13, 2005, Temecula Valley Bank was prepared to fund the Hos' loan, which was scheduled to close on December 31, 2005. The loan did not close on that day because Mr. Brown had not signed the indemnity agreement or obtained a Level II site assessment.
On January 23 and 24, 2006, Mr. Brown had Northwest Environmental Services (NES) take soil and water samples for a Level II assessment.
On January 25, 2006, counsel for Bryan's One Stop sent the Hos a letter demanding payment in full on the promissory note. On February 6, 2006, counsel caused a "Notice to Pay Rent or Quit Premises" to be posted on the front door of the business. Upon seeing the notice, Mrs. Ho contacted Rosellini. Rosellini advised her to wait until NES completed its cost estimate, at which time the bank loan would be ready to close. This would resolve the dispute. Two days later, Bryan's One Stop filed suit, seeking to recover all sums alleged due under the note, foreclosure of the security agreement securing payment of the note, and a declaration that the third PSA was null and void.
On February 15, 2006, NES proposed a clean-up cost of $175,000. At Rosellini's request, AEG submitted a clean-up cost estimate of $161,000.
On February 20, 2006, The Fortune Company faxed a copy of the required bank-SBA indemnity agreement to Mr. Brown's attorney. Mr. Brown refused to sign it. He also returned the Hos' February rent, claiming that late charges were owed. He demanded payment of both rent and late charges and threatened to file an unlawful detainer action.
Mr. Brown accepted late rent until March 2006.
The next day Rosellini urged Mr. Brown to sign the indemnity agreement, emphasizing that the Hos' loan would not close if he did not sign. Mr. Brown refused to sign. At trial, Mr. Brown testified that as of February 2006 he no longer agreed to the bank holding in escrow 150 percent of the estimated cleanup costs. He never communicated this position to anyone.
On March 20, 2006, the Hos filed an answer and counterclaim, seeking rescission and recovery of the down payment, the lease payments, and cost of improvements. In April, the Hos tendered the business back to the seller. At Mr. Brown's request, the Hos delivered the keys to Brown's attorney. Mr. Brown never resumed operation of the business. He relisted the property but was not able to sell it.
At a bench trial, the court ruled in favor of the Hos, holding that Mr. Brown had breached the duty of good faith and fair dealing by refusing to sign the indemnity agreement, which prevented the Hos from getting the loan and paying the promissory note. The court concluded that the Hos were entitled to rescind the contract and awarded them $143,423.68.
This amount reflected the sum of (1) $47,901.00, which was the down payment minus the value of the inventory, (2) $3,306.00, which was the cost of improvements, and (3) $92,216.68 in attorney fees and costs.
STANDARD OF REVIEW
Initially, we note that the Hos failed to file a respondents' brief within the extended time allowed by the court. Although our courts previously limited review in these circumstances to whether the appellant's brief made a prima facie showing of error, our Supreme Court has rejected this lowered standard of review, stating,
Hobart Corp. v. N. Cent. Credit Servs., Inc., 29 Wn. App. 302, 303, 628 P.2d 842 (1981); State v. Wilburn, 51 Wn. App. 827, 829-30, 755 P.2d 842 (1988).
A respondent who elects not to file a brief allows his or her opponent to put unanswered arguments before the court, and the court is entitled to make its decision based on the argument and record before it. The court, however, should not confine itself to whether the appellant has presented a prima facie case when the record and their own knowledge of the law permit a fuller review. Under the RAPs, there is no longer a basis for differing standards of review.
Adams v. Dep't of Labor Indus., 128 Wn.2d 224, 229, 905 P.2d 1220 (1995); In re Marriage of Gilbert, 88 Wn. App. 362, 366-67, 945 P.2d 238 (1997); Hanson v. Estell, 100 Wn. App. 281, 285-86, 997 P.2d 426 (2000).
Thus, the standard of review and responsibility of this court are the same as in any other appeal.
Where the trial court has weighed the evidence, this court reviews factual matters to determine whether "the trial court's factual findings are supported by substantial evidence and, if so, whether the findings support the conclusions of law." Substantial evidence is "evidence sufficient to persuade a fair-minded person of the truth of the declared premise." "There is a presumption in favor of the trial court's findings, and the party claiming error has the burden of showing that a finding of fact is not supported by substantial evidence."
Frank Coluccio Constr. Co. v. King County, 136 Wn. App. 751, 761, 150 P.3d 1147 (2007) (citing Brin v. Stutzman, 89 Wn. App. 809, 824, 951 P.2d 291 (1998)).
Coluccio, 136 Wn. App. at 761 (citing Brin, 89 Wn. App. at 824).
Coluccio, 136 Wn. App. at 761 (citing Fisher Props., Inc. v. Arden-Mayfair, Inc., 115 Wn.2d 364, 369, 798 P.2d 799 (1990)).
ANALYSIS
Breach of Purchase and Sale Agreement
Mr. Brown contends that the trial court improperly considered extrinsic evidence in ruling that payment of the promissory note was "conditioned upon the land loan closing, which all parties expected to occur on or before January 12, 2006."
The trial court explained that it considered extrinsic evidence under the "context rule" in Berg v. Hudesman to "ascertain the parties' intent as to when the sale of the land was to close." According to the court,
115 Wn.2d 657, 801 P.2d 222 (1990).
[This] dispute really concerns the relationship between the[] two "legs" [of the transaction].
Plaintiff argues that there were to be two distinct phases: The payment of the note for the business in January, followed by the sale of the land.
Defendants contend that, given the realities of financing, these two things had to happen at the same time. In other words for them to be able to pay back the note, they needed to obtain the loan for the land, which really required closing on the land simultaneously or before the note was due.
The court pointed out that the third PSA "does not clearly resolve this issue as to the sequencing of these events" and, in particular, that
[p]aragraph 4 of the agreement does not say when the real estate purchase was to occur in relation to the payment of the note. It says on or before September 1, 2006, which could be before, the same time as, or after the deadline for paying the note.
Paragraph 4 is the "Real Estate Purchase" provision.
In Washington all contracts are interpreted under the context rule. This rule provides the framework for interpreting written contract language, which involves determining the intent of the parties. To do this, the court views the contract as a whole, including the subject matter and objectives of the contract, all circumstances surrounding its formation, the subsequent acts and conduct of the parties, statements made in preliminary negotiations, and usage of trade and course of dealings. Context may not be used to contradict, modify, or add to the terms of the contract. When interpretation of a contract, whether integrated or not, depends upon the credibility of extrinsic evidence or a choice between reasonable inferences to be drawn from that evidence, the trier of fact determines the correct interpretation.
Tjart v. Smith Barney, Inc., 107 Wn. App. 885, 895, 28 P.3d 823 (2001) (citing Berg, 115 Wn.2d at 667).
Tjart, 107 Wn. App. at 895.
Tjart, 107 Wn. App. at 895.
Berg, 115 Wn.2d at 668.
Even before the Washington Supreme Court's adoption of the context rule, this state's courts traditionally admitted evidence "'to show that a negotiable instrument, absolute in form, though delivered to the payee, is not to become a binding obligation except upon the happening of a certain event.'"
Scott v. Wall, 55 Wn. App. 404, 407, 777 P.2d 581 (1989) (quoting Nelson Equip. Co. v. Goodman, 42 Wn.2d 284, 286-87, 254 P.2d 727 (1953)).
Here, the trial court noted in its oral ruling that Rosellini "drafted and negotiated the agreements, and he served as Mr. Brown's representative." Accordingly, it held that Rosellini's knowledge was imputed to Mr. Brown and that testimony by Rosellini and Mrs. Ho reflected the parties' mutual intent as to when the note was to be paid:
In conclusion of law 1, the trial court stated that "[k]nowledge which Mr. Rosellini acquired while acting as seller's agent is imputed to Bryan Brown, Bryan's One Stop and Brown Petroleum as his principals." In support of this conclusion of law, the trial court cited American Fidelity Casualty Co. v. Backstrom, 47 Wn.2d 77, 287 P.2d 124 (1955).
[Rosellini] testified that the idea for the note was to provide enough time for the bank to fund the loan before the note was due and that the parties accepted the note [was] to be paid out of the closing. And that is exactly what Mrs. Ho thought, too.
So I conclude that, while the August agreement contemplates a two-step process, the parties understood that those two steps were interdependent. That is to say, the payment of the note was dependent on the financing for the land.
Thus, the court properly used extrinsic evidence to determine the mutually intended relationship between the note and the land sale.
The trial court concluded that the land sale did not close before January 12, 2006, because Mr. Brown failed to diligently pursue obtaining the Level II assessment as required by the third PSA. It further concluded that Mr. Brown's refusal to sign the indemnity agreement, coupled with this lawsuit and the eviction notice, amounted to an anticipatory breach of the third PSA. These breaches entitled Hos to rescission and a portion of the monies they paid.
Mr. Brown suggests three reasons why the court erred. First, Mr. Brown contends that "the face of the unconditional Note unambiguously makes payment due on January 12, 2006, so it cannot reasonably be interpreted as contingent on closing a loan for a land deal that might (or might not) close as late as September 2006." He also points to a portion of Rosellini's testimony in which he stated that he told the Hos that if the loan did not close, they would still have to pay the note by the due date. Second, Mr. Brown emphasizes that the trial court held in its oral ruling that the first PSA was "defunct [and] reject[ed] [Mrs.] Ho's testimony to the contrary." Finally, Mr. Brown asserts that because "[o]ral contracts to sell land are . . . barred by the Statute of Frauds," the agreement found by the court is not enforceable.
These arguments fail. As stated previously, the trial court correctly applied the context rule to determine the timing of the payment of the note and the sale of the land. Under this rule, extrinsic evidence, here the testimony of Rosellini and Mrs. Ho, showed that oral terms supplemented the written terms of the third PSA and that, contrary to a printed provision of the third PSA, it was not a fully integrated agreement. It also established the objective of the parties and the relationship between the two legs of the parties' transaction. From this testimony, the trial court decided that the parties intended to close on the sale of the land either before or at the same time as payment on the note.
Consistent with the parties' agreement as determined by the trial court, the Hos had assumed operation of the business and made physical improvements to the premises, paid approximately $123,000 in cash under the first phase of the transaction, and secured a loan commitment from the bank. This is sufficient evidence of part performance to exempt the agreement from the statute of frauds.
See Firth v. Lu, 103 Wn. App. 267, 276-77, 12 P.3d 618 (2000) ("A sufficient showing of part performance will exempt an instrument containing an inadequate description from the statute of frauds." (citing Berg v. Ting, 125 Wn.2d 544, 555, 886 P.2d 564 (1995))); see also Bartlett v. Betlach, 136 Wn. App. 8, 15, 146 P.3d 1235 (2006) (stating that a party asserting part performance must generally show two of three factors: "(1) possession; (2) payment or tender of consideration; and (3) permanent, substantial, and valuable improvements." (citing Powers v. Hastings, 93 Wn.2d 709, 717, 612 P.2d 371 (1980))).
Mr. Brown also assigns error to several of the trial court's findings of fact. These findings include (1) finding of fact 17, that both parties continued to work toward closing the first PSA after it had expired on June 30, 2005; (2) finding of fact 23, that the parties agreed that the purchase price for the land under the third PSA would be $1,000,000; (3) finding of fact 26, that Mr. Brown knew that the promissory note was going to be paid out of the land loan and that if the Hos did not get the loan, it would be impossible for the Hos to pay for either the land or promissory note; (4) finding of fact 30, that Rosellini and Cho told Mr. Brown about the loan approval; and (5) finding of fact 33, that the land loan did not close as scheduled because Mr. Brown had not obtained a Level II site assessment or signed the indemnity agreement.
Substantial evidence supports these findings. Finding of fact 17 is supported by financial documents sent by The Fortune Company to Temecula Valley Bank in July 2005 and an "Application Conversation Log," showing that a loan processor spoke with the Hos several times in July and August 2005. Findings of fact 23 and 26 are supported by Rosellini's testimony that he told Mr. Brown that the purchase price for the land was $1,000,000 and that he knew the promissory note would be paid out of the funds from the bank loan. As discussed above, this knowledge is imputed to Mr. Brown. Furthermore, Mr. Brown admitted that he knew that the Hos did not have the funds to pay the promissory note and that the January 12, 2006, due date was picked as a reasonable date for them to obtain the loan. Finding of fact 30 is supported by the testimony of Rosellini and Cho that they separately told Mr. Brown about the loan approval, although both were unable to recall specific details. Finally, finding of fact 33 is supported by the testimony of Rosellini and Sadas, who both testified that a Level II assessment and signed indemnity agreement were needed to close on the Hos' loan.
Mr. Brown's challenge to these findings fails for another reason. He relies primarily on his own testimony and points to inconsistencies in the testimony of other witnesses. But, under the applicable standard of review, this court views evidence in the light most favorable to the prevailing party and defers to the trier of fact on issues of witness credibility.
Lopez v. Reynoso, 129 Wn. App. 165, 170, 118 P.3d 398 (2005).
The trial court correctly determined that the parties' agreement consisted of oral and written terms contained in the third PSA. These terms establish that the parties intended closing of the sale of the land to occur either before or at the same time as payment of the note for the business. We further agree with the court that Mr. Brown's "refusal to sign the indemnity, coupled with the . . . lawsuit and the 'Notice to pay or quit premises' signaled [his] intention not to perform under the August Agreement, which amounted to an anticipatory repudiation of that Agreement."
Because we affirm on this ground, we need not address the trial court's alternative ruling based on the duty of good faith and fair dealing.
Anticipatory repudiation occurs when "when one of the parties to a bilateral contract either expressly or impliedly repudiates the contract prior to the time of performance." An anticipatory breach cannot be "implied from doubtful and indefinite statements that performance may or may not take place," but is a "'positive statement or action by the promisor indicating distinctly and unequivocally that he either will not or cannot substantially perform any of his contractual obligations.'" Repudiation by a party generally gives rise to a claim for damages for breach of contract and excuses performance. Whether a party anticipatorily repudiated a contract is a question of fact.
Wallace Real Estate Inv., Inc. v. Groves, 124 Wn.2d 881, 898, 881 P.2d 1010 (1994).
Wallace Real Estate, 124 Wn.2d at 898 (quoting Olsen Media v. Energy Scis., Inc., 32 Wn. App. 579, 585, 648 P.2d 493 (1982)).
Bakotich v. Swanson, 91 Wn. App. 311, 315, 957 P.2d 275 (1998).
Turner v. Gunderson, 60 Wn. App. 696, 703, 807 P.2d 370 (1991).
VersusLaw, Inc. v. Stoel Rives, LLP, 127 Wn. App. 309, 321, 111 P.3d 866 (2005).
Mr. Brown's actions, particularly his refusal to sign the indemnity agreement, unequivocally indicated that the seller would not perform his obligation under the parties' agreement. Mr. Brown's claims that repudiation did not occur because a contract was never formed and because the Hos were required to tender performance have no merit. The trial court correctly decided that Mr. Brown anticipatorily breached the parties' agreement.
Mr. Brown mistakenly refers to the doctrine of rescission. See Eberhart v. Lind, 173 Wash. 316, 319, 23 P.2d 17 (1933) ("It is a well-settled rule that a party in default can not maintain an action of rescission without first tendering performance, or showing a willingness to perform, or else clearly establishing such facts as would excuse performance by him.")
Attorney Fees
Mr. Brown asks this court to reverse the trial court's award of fees and costs to the Hos on grounds that they should not have prevailed below. The trial court properly ruled that the Hos, as the prevailing party, were entitled to attorney fees and costs under a provision in the third PSA that allowed the prevailing party to recover attorney fees and costs. We similarly decline Mr. Brown's request for attorney fees on appeal.
CONCLUSION
The trial court's examination of extrinsic evidence was proper for purposes of interpreting the third PSA. In addition, substantial evidence supports the trial court's findings of fact. The extrinsic evidence and court's findings establish that the parties intended the closing of the sale of the land to occur either before or at the same time the promissory note was due and that Mr. Brown anticipatorily breached the agreement by refusing to sign the indemnity agreement.
Affirmed.
WE CONCUR: