Opinion
No. 56047-6-I.
May 1, 2006.
Appeal from a judgment of the Superior Court for Skagit County, No. 04-2-02102-5, Susan K. Cook, J., entered March 10, 2005.
Counsel for Petitioner(s), Ralph I. Freese, Attorney at Law, 7009 212th St SW Ste 203, Edmonds, WA 98026-7742.
Counsel for Respondent(s), Jeffrey T. Broihier, Attorney at Law, 720 3rd Ave Ste 1600, Seattle, WA 98104-1813.
Affirmed in part, reversed in part, and remanded by unpublished opinion per Cox, J., concurred in by Appelwick, C.J., and Baker, J.
A purchaser may obtain specific performance of a contract for the sale of realty under appropriate circumstances. Subject to the restriction that a court may not order something that the parties to such a contract have not agreed upon, a court may order either party to partially perform when it is no longer possible to perform in accordance with the terms of the contract. Here, there was a valid and enforceable agreement between Robert S. Peterson and Joseph and Kimberly Woodmansee to sell what these parties describe as "Parcel 2." Accordingly, the trial court properly ordered specific performance to sell Parcel 2. But there was never any enforceable agreement between these parties to sell Peterson's undivided one-half interest in what they describe as "Parcel 3." Thus, there was no authority to order specific performance to require Peterson to convey his undivided one-half interest in Parcel 3. We affirm in part, reverse in part, and remand for further proceedings.
Streater v. White, 26 Wn. App. 430, 432-33, 613 P.2d 187 (1980).
Id. at 433.
The material facts for purposes of this discretionary review are undisputed. Robert Peterson signed three separate Vacant Land Purchase and Sale Agreements (PSAs) dated April 15, 2004 to sell contiguous parcels of land for development by Joseph and Kimberly Woodmansee (collectively "Woodmansee"). The sale of what the parties describe as "Parcel 1" closed and is not at issue in this appeal.
Parcel 2 consists of 20 acres solely owned by Peterson. Parcel 3 consists of approximately 18 acres. Peterson owns an undivided one-half interest in that parcel as a tenant in common with other owners. Ed, Shirley, and Alayna Sheron (collectively "Sheron") and Jim Hillman each own an undivided one-quarter interest in this parcel.
After Peterson and Woodmansee signed PSAs for Parcels 2 and 3, these parties disputed the terms of both agreements. Moreover, the tenants in common for Parcel 3, other than Peterson, did not sign the original PSA dated April 15, 2004 for that parcel. They signed later agreements for that parcel, one of which was dated September 27, 2004, which was signed solely by them and Woodmansee.
The sales of the two parcels in dispute did not timely close, and Woodmansee commenced this action. Woodmansee sought specific performance of the sales of Parcel 2 and Parcel 3, and, alternatively, partition of Parcel 3, among other relief.
Clerk's Papers at 1-33.
Woodmansee moved for summary judgment, and the trial court denied Peterson's motion for continuance. Thereafter, the court granted in part Woodmansee's motion and ordered specific performance. In its order, the trial court expressly reserved for later determination Woodmansee's claim against Peterson for damages, dismissed Peterson's counterclaims, and awarded Woodmansee attorney fees. Peterson executed, under protest, the necessary documents for the sales of Parcel 2 and his undivided one-half interest in Parcel 3 to Woodmansee. Contemporaneously with the closing of the latter sale, the tenants in common for the remaining interests in Parcel 3 separately conveyed their interests to Woodmansee.
Clerk's Papers at 453.
This court granted Peterson's request for discretionary review.
RAP 2.3(b)(2).
SPECIFIC PERFORMANCE
Peterson makes three basic arguments. First, he claims that the two PSAs lack material terms — price — that precluded the grant of specific performance. Second, he contends Woodmansee was unable to close the transactions on the agreed closing date. Third, he contends that the trial court lacked a basis to force him to convey his undivided one-half interest in Parcel 3 to Woodmansee. We disagree with the first two propositions but agree, in part, with his arguments supporting the third.
This court may affirm an order granting summary judgment if there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Summary judgment is proper when reasonable minds could reach but one conclusion regarding the material facts. Review of all trial court rulings made in conjunction with a summary judgment is de novo.
Tran v. State Farm Fire and Casualty Co., 136 Wn.2d 214, 223, 961 P.2d 358 (1998).
Folsom v. Burger King, 135 Wn.2d 658, 663, 958 P.2d 301 (1998).
"It is fundamental that in order to . . . enable the court to decree specific performance, the terms of the contract must be clear, definite, certain, and complete. The contract must be free from doubt, vagueness, and ambiguity, so as to leave nothing to conjecture or to be supplied by the court." "A greater degree of certainty is required for specific performance in equity than is necessary to establish a contract as the basis of an action at law for damages."
Cascade Timber Co. v. Northern P.R. Co., 28 Wn.2d 684, 692, 184 P.2d 90 (1947).
Id.
A purchaser may obtain specific performance of a contract for the sale of realty under appropriate circumstances. Subject to the restriction that a court may not order something that the parties to such a contract have not agreed upon, a court may order either party to partially perform when it is no longer possible to perform in accordance with the terms of the contract. While a trial court has broad discretion fashioning equitable remedies, "the question of whether equitable relief is appropriate is a question of law," which we review de novo.
Streater, 26 Wn. App. at 432-33.
Id. at 433.
Niemann v. Vaughn Community Church, 154 Wn.2d 365, 374, 113 P.3d 463 (2005) (citing Puget Sound Nat'l Bank of Tacoma v. Easterday, 56 Wn.2d 937, 943, 350 P.2d 444 (1960) (deciding that the question of whether the trial court exceeded its authority in applying the cy pres doctrine to be a question of law); Townsend v. Charles Schalkenbach Home for Boys, Inc., 33 Wn.2d 255, 205 P.2d 345 (1949)).
Price
Peterson argues that the trial court erred in ordering specific performance because the PSAs for both Parcel 2 and Parcel 3 lack specification of the purchase prices, which are material terms, and are therefore unenforceable. Specifically, he contends that the closing documents for each parcel shifted the significant financial burden of paying open space tax recapture to him as seller. According to Peterson, this "materially impacted" the purchase price. Alternatively, he argues that the PSAs are ambiguous as to the price term because the legal descriptions in both documents incorporate the open space designation. These arguments are wholly unpersuasive.
"A court of equity will not decree specific performance of a contract which does not fix the price or consideration clearly, definitely, certainly, and unambiguously, or provide a way by which it can be fixed with certainty." A contract may provide a way by which the purchase price may be fixed with certainty.
Lager v. Berggren, 187 Wash. 462, 467, 60 P.2d 99 (1936).
See, e.g., Shermans Food Stores, Inc. v. Campbell Food Markets, Inc., 59 Wn.2d 251, 254, 367 P.2d 141 (1961) (approving the contract inventory price of 'retail at date of closing less 17 percent.').
First, the PSA for Parcel 2 expressly states that the purchase price is $1,337,500.00 and further states in an addendum that the price is based on a rate of $65,000 per acre. The PSA for Parcel 3 expressly states that the purchase price is based on the same rate of $65,000 per acre. There is no ambiguity in these sales prices.
Second, Peterson's argument that the closing documents somehow create ambiguity as to price for either sale is plainly wrong. The contracts that established the material terms of the sales, including the price for each, are the PSAs, not the documents that the parties later executed at closing of the sales.
Third, that Peterson had the statutory obligation to pay the open space tax recapture obligation arising from the termination of the open space tax designation has nothing to do with establishing price. His payment of that tax obligation is akin to his payment of his pro-rated share of real estate taxes at closing of these transactions. Pro-ration of such taxes does not modify the purchase price. Neither does payment of the tax recapture obligation.
Moreover, a contract that is silent on the issue of a statutory tax burden is not ambiguous. By statute, the seller must bear the burden of additional taxes upon sale of property designated as "open space" unless the buyer signs a notice of classification continuance. Peterson is charged with the knowledge of his statutory obligation. Woodmansee did not sign a notice of continuance, nor do the PSAs contain any requirement that he do so.
Id. at 936.
RCW 84.34.108(c). The relevant provision provides that removal of the classification occurs upon:
Sale or transfer of all or a portion of the land to a new owner, unless the new owner has signed a notice of classification continuance, except transfer to an owner who is an heir or devisee of a deceased owner shall not, by itself, result in removal of classification . . . If the notice of continuance is not signed by the new owner and attached to the real estate excise tax affidavit, all additional taxes calculated pursuant to subsection (4) of this section shall become due and payable by the seller or transferor at time of sale. . . .
Urban Constr. Co. v. Seattle Urban League, 12 Wn. App. 935, 937, 533 P.2d 392 (1975).
Peterson cites Key Design, Inc. v. Moser to argue that documents demonstrating his knowledge of the tax obligation when executing the contract are inadmissible to establish the price term in the purchase and sale agreement. Though Key Design rejected permitting judicial admissions to establish material terms in a real estate PSA, Peterson's reliance on it is misplaced. Peterson's actual knowledge of his tax obligation is of no legal significance.
138 Wn.2d 875, 983 P.2d 653 (1999).
Id. at 884.
Urban Constr., 12 Wn. App. at 937.
Finally, Peterson cites no authority for the novel proposition that the inclusion of the open space designation in the legal description of the properties creates ambiguity in the price term. As we have said, the price for each parcel is unambiguous. We need not further address this argument.
See State v. Johnson, 119 Wn.2d 167, 171, 829 P.2d 1082 (1992).
We conclude that the PSAs are not unenforceable due either to ambiguity in the purchase price or because of the open space tax recapture.
Closing Date
Peterson further argues that neither PSA is enforceable because Woodmansee was unable to close on December 15, 2004, the closing date required by the contracts. Specifically, he contends funding, contingent upon an appraisal the bank did not receive until December 17, 2004, was unavailable on the contractual closing date. The record does not support Peterson's contention. The declaration of James Vandermey, the senior vice president of People's Bank, states that "[o]n the closing date of December 15, 2004, all the closing funds for both parcels were available [to the] Woodmansees to purchase the properties. The only condition remaining to be satisfied was Mr. Peterson's execution of the closing documents."
Clerk's Papers at 141-43.
Peterson relies selectively on Vandermey's deposition. There, the bank official explained that the appraisal that was used for underwriting had initially been done for Whidbey Island Bank and was accepted by People's Bank on December 14. People's Bank then commissioned a retroactive appraisal to enable it to place its name on the appraisal cover sheet. The final copy of the appraisal was therefore dated December 17, 2004. Nothing in Vandermey's testimony supports the notion that this in any way could have prevented Woodmansee from closing on December 15.
We conclude that the PSAs were not unenforceable due to the buyer's inability to close on the contractually required closing date.
Mutual Assent
Peterson next argues that the court improperly granted specific performance against him alone for the sale of his undivided one-half interest in Parcel 3. Specifically, he argues that the plain terms of the April 15, 2004 PSA that he and Woodmansee alone signed contemplate a sale of all the sellers' interests for a specific price, not the terms the court ordered. Because the court ordered the sale on terms to which Peterson and Woodmansee never expressly agreed, we conclude that specific performance was not appropriate in this instance.
"Specific performance connotes 'performance specifically as agreed.' Where the parties have not reached agreement, there is nothing for equity to enforce." Although a court may order a party to perform its obligations under a contract, a "court may not order something that the parties have not agreed upon. . . ."
Haire v. Patterson, 63 Wn.2d 282, 286, 386 P.2d 953 (1963).
Streater, 26 Wn. App. at 433.
Here, Woodmansee asked the trial court to use the PSA dated April 15, 2004, which Peterson and Woodmansee alone signed, as the basis for specific performance for the sale of Peterson's undivided interest in Parcel 3. It appears the trial court ordered the sale based on this request.
The problem is that neither that document nor any other signed by Peterson in this record provides for the sale the court ordered — the sale of his undivided one-half interest. Rather, the April 15, 2004 agreement expressly contemplated sale of all interests in the property for a specific price. It is undisputed that Peterson offered to obtain the signatures of the other tenants in common on the agreement but never did. It is equally undisputed that the other tenants in common never signed that document. Thus, we have before us a partially executed document that does not provide for the conveyance of Peterson's undivided one-half interest in a parcel owned by him and other tenants in common. There is no agreement by him to sell his undivided one-half interest, only a potential agreement for all tenants in common to sell 100 percent of their interests on the terms stated in the April 15 document.
Examination of the other documents in the record fails to cure this basic defect. For example, Peterson signed a second PSA dated August 17, 2004 for Parcel 3 on different terms. It was signed by all his co-owners except James Hillman. When Peterson tried to add a clause requiring his co-owners to pay a consulting fee to Peterson's son, the Sherons refused to initial the change and Hillman returned the PSA unsigned. Woodmansee took the position below that this agreement had no further force or effect to bind anyone to a sale. We agree.
Similarly, all the co-owners except Peterson signed a third PSA for Parcel 3, which is dated September 27, 2004. The co-owners also signed an addendum to this third agreement that provided that they would sell their fractional interests in the property to Woodmansee. The price term in this agreement is $100,000 per acre. It is on the basis of this last document that the court appears to have directed the closing of the sale of the interests of Peterson's co-tenants in Parcel 3 to Woodmansee.
None of these matters, however, alters the fact that there never was an agreement by Peterson to sell his undivided one-half interest in Parcel 3. Without such an agreement on that point, there was no authority for the court to order specific performance requiring Peterson to convey his one-half undivided interest in that parcel.
Woodmansee has failed to cite to this court any case in which a court has granted specific performance where no agreement existed on the matter specifically enforced. We have found none in our independent search.
See, e.g., Kruse v. Hemp, 121 Wn.2d 715, 722-23, 853 P.2d 1373 (1993) (refusing to order specific performance by a cash sale and distinguishing between cash sales and installment purchases for purposes of specific performance, citing Hubbell v. Ward.); cf. Hubbell v. Ward, 40 Wn.2d 779, 787, 246 P.2d 468 (1952) (specifically enforcing as a cash sale an earnest money agreement where all the essential terms of the agreement, except for the form of the real estate contract to be executed at closing, were agreed upon).
Because we hold that there was no agreement for the sale of Peterson's undivided one-half interest in Parcel 3 for the trial court to specifically enforce, we reverse the summary judgment order and decree of specific performance with respect to that parcel. We therefore need not address the remaining arguments with respect to the order.
We note that the trial court specifically retained for later consideration the subject of damages for Peterson's actions and/or omissions in this matter. Presumably, Woodmansee seeks substantial damages on the theories to be presented on remand. Because those matters are not presently before us, we express no opinion on them.
CONTINUANCE
Peterson argues that the trial court abused its discretion in denying his motion for a continuance to conduct discovery in preparation for the summary judgment hearing. We disagree.
If a party opposing a motion for summary judgment shows through affidavits that he cannot present by affidavit facts essential to justify his opposition, the court may refuse the application for judgment or, in the alternative, order a continuance to permit additional discovery. A ruling on a CR 56(f) motion for a continuance is reviewed for manifest abuse of discretion. A court does not abuse its discretion in deciding not to order a continuance under CR 56(f) if (1) the requesting party does not offer a good reason for the delay in obtaining the desired evidence, (2) the requesting party does not state what evidence would be established through the additional discovery, or (3) the desired evidence will not raise a genuine issue of material fact.
Janda v. Brier Realty, 97 Wn. App. 45, 54, 984 P.2d 412 (1999); Coggle v. Snow, 56 Wn. App. 499, 507, 784 P.2d 554 (1990).
Janda, 97 Wn. App. at 54.
Peterson's counsel was served with Woodmansee's motion for summary judgment on February 8, 2005. A week later he filed a motion for continuance pursuant to CR 56(f), which the court denied without prejudice. Peterson's renewed motion for continuance was similarly denied as part of the summary judgment order.
Peterson argued to the trial court that he needed more time to take co-owners' depositions in order to support his claims of agency and of ratification. In his renewed motion for continuance, he argued that he needed the information to defend against Woodmansee's damages claims. In addition, he argued that he sought, but had been unable to obtain, documents from the bank to show Woodmansee was unable to close on December 15, 2004 due to unavailable funding. However, Peterson had already taken Vandermey's deposition which explained that prior to the closing date the bank had received and approved the required appraisal.
Because the additional discovery Peterson sought would not have raised a genuine issue of material fact, the trial court did not abuse its discretion in denying the motions for continuance.
COUNTERCLAIMS
In his opening brief, Peterson assigns error to the trial court's dismissal of his counterclaims for slander of title and damages. However, he presents no argument discussing the alleged error. We will not review an issue raised in passing or unsupported by authority or persuasive argument.
See Johnson, 119 Wn.2d at 171.
ATTORNEY FEES
Peterson maintains that the trial court erred in awarding attorney fees to Woodmansee. In addition, both parties request their reasonable attorney fees on appeal pursuant to RAP 18.1, RCW 4.84.330, and Herzog Aluminum, Inc. v. General American Window Corporation.
39 Wn. App. 188, 692 P.2d 867 (1984).
RCW 4.84.330 is statutory authority controlling the award of attorney fees and costs in actions on a contract, and provides, in relevant part: In any action on a contract . . . where such contract or lease specifically provides that attorney's fees and costs, which are incurred to enforce the provisions of such contract . . . shall be awarded to one of the parties, the prevailing party . . . shall be entitled to reasonable attorney's fees in addition to costs and necessary disbursements. . . .
Under RCW 4.84.330, attorney fees and costs to the prevailing party in any action on a contract are mandatory and encompasses any action in which it is alleged that a person is liable on a contract. Whether a party is entitled to attorney fees is an issue of law that we review de novo.
State v. Farmers Union Grain Co., 80 Wn. App. 287, 294, 908 P.2d 386 (1996).
Herzog, 39 Wn. App. at 197 (quoting RCW 4.84.330).
Tradewell Group v. Mavis, 71 Wn. App. 120, 126, 857 P.2d 1053 (1993).
The PSAs for both parcels that are at issue in this review contain attorney fee provisions for the prevailing party in a suit "concerning this agreement." "[A] prevailing party is one who receives an affirmative judgment in his or her favor." Here, Woodmansee prevailed below and was entitled to an award of attorney fees based on the contract provision of the PSA for Parcel 2. Because Woodmansee also prevails on appeal respecting Parcel 2, an award for that portion of the litigation is proper. It is unclear from the record before us whether the trial court also awarded fees on the basis of the similar fee provision in the PSA for Parcel 3. Woodmansee is not entitled to fees on appeal with respect to that Parcel. Rather, Peterson has prevailed and is entitled to an award.
Riss v. Angel, 131 Wn.2d 612, 633, 934 P.2d 669 (1997).
We remand to the trial court for a determination of the amount of fees and costs, including fees and costs on appeal, and for such further proceedings as are proper.
We affirm the court's grant of specific performance of the Parcel 2 sale, reverse such grant for Parcel 3, and remand for further proceedings that are consistent with this decision.
APPELWICK and BAKER, JJ., concur.