Opinion
No. 60659-0-I.
June 16, 2008.
Appeal from a judgment of the Superior Court for Snohomish County, No. 06-2-09133-5, Linda C. Krese, J., entered September 17, 2007.
Affirmed by unpublished per curiam opinion.
A purchase and sale agreement declared that time was of the essence, set a fixed closing date, and placed the burden on the buyer to pay the escrow costs. Before the closing date, the buyer unsuccessfully sought the seller's agreement to proceed without escrow. The buyer also failed to obtain the seller's signature on a proposed written addendum extending the closing date. After the buyer failed to tender performance by the closing date, the seller returned the earnest money. The buyer sought specific performance. Because the buyer did not identify a genuine issue of material fact that the seller breached a relevant duty or effectively waived the closing deadline, the trial court correctly concluded that the contract automatically terminated when the closing date passed. Summary judgment was properly granted.
When reviewing an order for summary judgment, the appellate court engages in the same inquiry as the trial court. Mt. Park Homeowners Ass'n v. Tydings, 125 Wn.2d 337, 341, 883 P.2d 1383 (1994). This court will affirm summary judgment if no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. CR 56(c). All facts and reasonable inferences are considered in the light most favorable to the nonmoving party and all questions of law are reviewed de novo. Mt. Park Homeowners Ass'n, 125 Wn.2d at 341.
David Waite and Charles Von Goedert, each experienced in real estate development, entered into a purchase and sale agreement on February 12, 2006, for a vacant lot Von Goedert owned. As a condition of the agreement, Waite provided Von Goedert a $2,000.00 check for earnest money. The contract set a closing date of March 31, 2006, designated Chicago Title Company as the escrow agent, and put the burden of paying all closing costs on Waite. Waite testified that he understood he had the burden of presenting the necessary paperwork to the escrow agent to accomplish the closing.
Later in February 2006, the parties discussed the transaction during a telephone call. Waite desired to complete the sale without escrow so he could avoid the closing costs. The parties discussed the need to prepare a deed and tax affidavit to proceed without escrow and Waite said he would prepare those documents. They did not reach agreement, however, on how to complete payment without an escrow agent.
In approximately the middle of March, the parties spoke again by telephone. Von Goedert told Waite he would be out of town on March 31 and asked if they could accelerate the closing date to March 27. Waite said that was not possible, and they discussed extending the closing date into April. According to Waite, Von Goedert agreed to a new closing date of April 4, but insisted on a signed original written addendum to the contract extending the date, which Waite testified he later prepared, signed and mailed to Van Goedert. The parties were still unable to agree, however, on a method for proceeding without escrow. Waite offered to complete all necessary paperwork and be responsible for any additional costs, but proposed a simultaneous exchange of payment and documents somewhere other than at Chicago Title, while Von Goedert insisted that Waite would have to deposit the purchase price in his account at least three days in advance of closing, which Waite did not want to do.
On March 22, Von Goedert left a telephone message for Waite to call him. Waite did not call back until March 23, but by then Von Goedert had left town for a short vacation. Over the next week, Waite continued to try to telephone Von Goedert to discover whether Von Goedert would accept a form of escrow other than Chicago Title. Waite did not deposit the purchase price or closing costs with Chicago Title by March 31 as required by the contract.
According to Von Goedert, he had not received any written extension in the mail when he returned to town on April 2, and he said that in fact, he never received such a document. He returned Waite's earnest money check with a letter dated April 2 indicating the parties were free of their obligations under the contract and reiterating that he did not agree to Waite's requested method for changing the closing process. Waite wrote a letter back to Van Goedert dated April 5. In it, he apologized for causing a misunderstanding during their last telephone conversation, indicated that he had obtained the money by March 30, and inquired as to whether Von Goedert wanted to use the escrow agent in the contract or use a lawyer for closing instead. Von Goedert did not respond to the letter.
Waite filed suit for specific performance of the contract.
Generally, absent estoppel or waiver, an agreement making time of the essence and fixing a termination date becomes legally unenforceable upon the stated termination date if performance is not tendered. Nadeau v. Beers, 73 Wn.2d 608, 610, 440 P.2d 164 (1968). Waite acknowledges this rule, but relies on Langston v. Huffacker, 36 Wn. App. 779, 789, 678 P.2d 1265 (1984), for the proposition that a seller's bad faith failure to act with reasonable diligence to complete a closing will entitle a purchaser to specific performance. In Langston, the seller did not act diligently in trying to clear title to the subject property. As a result, the closing agent did not have all of the necessary documents at the time of closing. Because the failure to close on time was caused by the seller's bad faith delay in clearing title, the purchaser was entitled to specific performance. Langston, 36 Wn. App. at 789.
Unlike the seller in Langston, Von Goedert did act timely to clear title to the subject property. Waite nonetheless contends that Von Goedert failed to meet his obligations under the contract in two other ways: by failing to deposit the earnest money check with the closing agent, which would have caused the agent to open a file; and by leaving town on March 23 without giving Waite a way to reach him. But neither of these actions shows bad faith on Von Goedert's part.
As for Von Goedert's failure to deposit the earnest money with the escrow agent, it is undisputed that this had no effect on Waite's ability to complete his obligations under the contract and thus require Von Goedert to perform. As Von Goedert acknowledged at his deposition, if Waite had tendered the purchase price and closing costs to the escrow agent by March 31, Von Goedert would have been obligated to deliver title. But Waite, for his own reasons, chose not to perform as required by the contract.
It is likewise clear that Von Goedert's absence beginning on March 23 did not deprive Waite of his ability to complete his obligations under the contract and thus bind Von Goedert to deliver the title. The evidence is undisputed that Waite simply chose not to tender performance by the contractual closing date because he wished to amend the escrow provisions. In fact, as is evidenced by his April 5 letter, Waite still wanted to discuss such changes before tendering payment even after the closing date. But the requirement that contracting parties act in good faith does not require a party to accept a material change in the terms of the contract. Betchard-Clayton, Inc. v. King, 41 Wn. App. 887, 890, 707 P.2d 1361 (1985). "As a matter of law, there cannot be a breach of the duty of good faith when a party simply stands on its rights to require performance of a contract according to its terms." Badgett v. Security State Bank, 116 Wn.2d 563, 570, 807 P.2d 356 (1991). Von Goedert was not required to stay in town to further discuss Waite's desire to alter the contract's escrow provisions and did not act in bad faith by simply holding Waite to the contract closing date.
Waite next argues that there was a genuine issue of material fact that Von Goedert waived the closing date. A party to a contract may waive a contract provision that is meant for its benefit. And a party may imply such a waiver by conduct. Nadeau, 73 Wn.2d at 611. But such a waiver "'requires unequivocal acts of conduct evidencing an intent to waive.'" Mike M. Johnson, Inc. v. County of Spokane, 150 Wn.2d 375, 386, 78 P.3d 161 (2003) quoting Absher Constr. Co. v. Kent Sch. Dist. No. 415, 77 Wn. App. 137, 143, 890 P.2d 1071 (1995). And waiver will not be inferred from doubtful or ambiguous factors. U.S. Oil Ref. Co. v. Lee Eastes Tank Lines, Inc., 104 Wn. App. 823, 830-31, 16 P.3d 1278 (2001).
Waite points first to Von Goedert's initial request to make the closing date earlier in March. But seeking to accelerate an existing deadline depends on obtaining agreement; it is not the same as abandoning the existing deadline.
Waite next notes that there was a dispute in the deposition testimony. According to Von Goedert, when Waite raised the possibility of moving the closing date into April, Von Goedert replied that Waite should send him a written waiver and he would consider it. Waite, in contrast, testified that Von Goedert agreed they could move the closing deadline to April 4. This dispute, however, is not material because even Waite acknowledged that Von Goedert had insisted on a written agreement extending the date signed by both parties. And it was undisputed that Von Goedert never signed such an addendum.
When, as here, a contract is required by the statute of frauds to be in writing, modification of a material term of the contract must also be achieved by a written document unless there is part performance. Anderson v. Anderson, 128 Wash. 504, 223 P. 323 (1924). Even under Waite's version of the facts, Von Goedert did not waive this requirement and there was no part performance. Rather, Von Goedert specifically demanded that the writing requirement be met and it was not. Waite presented no evidence that Von Goedert unequivocally waived the requirement that any extension of the closing date be accomplished with a written addendum.
Accordingly, Waite has not shown that the trial court erred in concluding that there was no genuine issue of material fact that the contract terminated when the closing date passed without performance. We therefore need not address Von Goedert's alternative argument that the agreement was unenforceable under the statute of frauds because of an inadequate legal description. The trial court correctly granted summary judgment.
Von Goedert seeks attorney fees. Waite admits that the contract contained a fees provision, but argues that the situation is analogous to Willener v. Sweeting, 107 Wn.2d 388, 730 P.2d 45 (1986). In Willener, neither party sought specific performance. Instead, both parties withdrew from a purchase and sale agreement and declared the contract null and void, leaving the trial court to fashion an equitable solution in the nature of recission. Willener, 107 Wn.2d at 396. The Supreme Court affirmed the trial court's denial of fees because the trial court correctly attempted to restore the parties to their relative positions had no contract ever been made. Willener is not analogous to the present case.
In contrast to the facts in Willener, neither party here disputed that the purchase and sale agreement was a valid contract. The contract provided that "If Buyer or Seller institutes suit against the other concerning this Agreement, the prevailing party is entitled to reasonable attorneys' fees and expenses." The suit obviously concerned the contract. Had Waite prevailed in his suit for specific performance, he clearly would have been entitled to fees. Fees are appropriate and will be awarded to Von Goedert, subject to compliance with RAP 18.1.
Clerk's Papers at 163.
Affirmed.
FOR THE COURT: