Opinion
No. 57742-5-I.
March 12, 2007.
Appeal from a judgment of the Superior Court for King County, No. 05-2-04594-9, Julie Spector, J., entered February 9, 2006.
Counsel for Appellant(s), Kevin W Roberts, Dunn Black PS, Spokane, WA.
Edward Joseph Bruya, Keefe King Bowman PS, Spokane, WA.
Counsel for Respondent(s), P. Stephen Dijulio, Foster Pepper PLLC, Seattle, WA.
Jeffrey Burton Taraday, Foster Pepper PLLC, Seattle, WA.
Sharon Elizabeth Cates, Foster Pepper PLLC, Seattle, WA.
Margaret A. Pahl, Office of the Prosecuting Attorney, Seattle, WA.
Gary John Krohn, Northgate Executive Center II, Seattle, WA.
Daryl Allan Deutsch, Attorney at Law, Bellevue, WA.
Reversed and remanded by unpublished opinion per Ellington, J., concurred in by Agid and Cox, JJ.
The Seattle Monorail Project (SMP) paid a landowner for immediate use and possession of his property. The payment promised to be nonrefundable even if SMP did not proceed with condemnation or construction. After SMP's demise, a court vacated the finding of public use and necessity. The court then ordered the landowner to choose between refunding SMP's payment or proceeding with condemnation in the absence of any legitimate public use. But the unambiguous contract language cannot support an order forcing such a choice. We reverse.
BACKGROUND
This eminent domain proceeding involves property owned by JREA Real Estate LLC and Friedman and Bruya, Inc. (JREA) in the Interbay area. SMP sought to acquire the property for the purpose of construction and operation of the Green Line and related facilities. In February 2005, SMP filed a petition for condemnation of a permanent aerial easement over the property, as well as an access easement for repair and maintenance and a temporary construction easement to last for the six month duration of construction.
On May 19, 2005, SMP and JREA entered into an agreement by which JREA granted SMP the right to possess and use the property for and in consideration of SMP's payment of a deposit of $105,581, which sum was nonrefundable:
[T]he full amount of such payment shall in all circumstances be nonrefundable to [SMP], irrespective of whether [SMP] proceeds with condemnation, whether the above-described project is constructed, or the final adjudication of just compensation for the taking of the real property.
Clerk's Papers at 221. On the same date, the trial court entered the parties' stipulation and order of public use and necessity.
In November 2005, Seattle voters rejected the monorail project.
The next month, JREA filed a motion to vacate the stipulated order of public use and necessity. The trial court granted the motion in part, concluding that "the predicate" for the order "no longer exists." Clerk's Papers at 260.
The court denied JREA's request for fees.
The court went further, however, and ruled that the possession and use agreement was voidable for the same reason. The court then reasoned that enforcing the nonrefundability clause would be an unjust windfall allowing JREA to keep both its property and the deposit. The court gave JREA 30 days to elect either to return the deposit and keep the property, or keep the money and lose the property by condemnation.
JREA sought reconsideration, pointing out that its motion papers had sought only vacation of the use and necessity finding, not an interpretation of the possession and use agreement, and that the notion of windfall appeared only in one line of SMP's brief. JREA submitted evidence that it agreed to immediate use and possession only because SMP agreed the deposit was nonrefundable in every circumstance. JREA also pointed out that SMP's several requests for delaying the condemnation trial were supported by SMP's emphatic insistence that JREA would not be damaged because of the nonrefundability clause.
The court denied the motion for reconsideration and clarified that JREA had 30 days to elect to (1) refund the possession and use deposit to SMP within 120 days in exchange for the property interests at issue, or (2) retain the possession and use deposit and proceed to trial on just compensation.
JREA appeals both the order and the ruling on reconsideration.
SMP contested the order's appealability. We accepted review under RAP 2.3(a)(4).
DISCUSSION
The Washington State Constitution, article I, section 16 prohibits the taking of private property for a private use. A condemnor alleging the need for property for a public use may proceed under either of two procedures: a traditional eminent domain proceeding or an accelerated process under the "quick-take" provision of RCW 8.04.090, which permits the condemnor to have use and possession of the property before determination of just compensation. Both procedures require a final decree of public use and necessity before condemnation may be completed. State v. Calkins, 54 Wn.2d 521, 526, 342 P.2d 620 (1959) (eminent domain proceeding requires three separate judgments: (1) decree of public use and necessity; (2) judgment fixing amount of the award; (3) final decree transferring title); RCW 8.04.090 ("In case the state shall require immediate possession and use of the property sought to be condemned, and an order of necessity shall have been granted, and no review has been taken therefrom, the attorney general may stipulate with respondents . . . for an order of immediate possession and use . . . [and after the landowners are paid the agreed amount,] [t]he court . . . shall enter an order granting to the state the immediate possession and use of the property.") (emphasis added).
Neither party challenges the trial court's vacation of the order of public use and necessity. It is thus a verity on appeal that there is no public use and necessity. Sorenson v. Pyeatt, 158 Wn.2d 523, 528, 146 P.3d 1172 (2006). This means SMP cannot condemn any interest in JREA's property. The trial court erred in adopting a remedy that contemplated finalizing the condemnation.
Because neither party challenges vacation of the finding, we do not address whether the court could have declined to vacate the finding of public use and necessity and permitted completion of the condemnation despite the referendum results. Isla Verde Int'l Holdings, Inc. v. City of Camas, 146 Wn.2d 740, 752, 49 P.3d 867 (2002) (where possible, appellate courts should resolve cases on nonconstitutional grounds).
It remains for us to determine the proper resolution of this failed condemnation action. The superior court's ruling effectively amounted to a summary judgment interpreting the possession and use agreement. We therefore review that ruling under the usual summary judgment standard.
The court's order amounted to a judgment, announcing legal conclusions and "the final determination of the rights of the parties in [an] action." CR 54. A motion is properly treated as a summary judgment motion where the court reaches judgment after considering facts and evidence outside the pleadings. CR 56; see Gain v. Carroll Mill Co., 114 Wn.2d 254, 256 n. 1, 787 P.2d 553 (1990).
Summary judgment is appropriate where there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law. CR 56(c). This court reviews a summary judgment ruling de novo. City of Spokane v. Spokane County, 158 Wn.2d 661, 671, 146 P.3d 893 (2006).
The parties infer from the court's use of the term "predicate" that the court found the public use and necessity finding to be a condition precedent to enforceability. But failure of a condition precedent typically results in discharge of duties, rather than a void or voidable contract. Tacoma Northpark, LLC v. NW, LLC, 123 Wn. App. 73, 79, 96 P.3d 454 (2004) (citing Ross v. Harding, 64 Wn.2d 231, 236, 391 P.2d 526 (1964)). Other possible bases for finding a contract voidable include mistake, impracticability, impossibility, or frustration of purpose. Restatement (Second) of Contracts §§ 7 cmt. b (1979) (mutual mistake); Tacoma Northpark, 123 Wn. App. at 81 (impossibility or impracticability). But to apply any of these doctrines requires interpreting the contract. Walter Implement, Inc. v. Focht, 107 Wn.2d 553, 556-57, 730 P.2d 1340 (1987) (condition precedent); Tacoma Northpark, 123 Wn. App. at 79 ("Whether a provision is a condition, the nonfulfillment of which excuses performance, depends upon the intent of the parties, to be ascertained from a fair and reasonable construction of the language used in the light of all the surrounding circumstances when they executed the contract.") (citing Ross, 64 Wn.2d at 236)); St. Regis Paper Co. v. Wicklund, 93 Wn.2d 497, 502, 610 P.2d 903 (1980) (parol evidence admissible to prove parties' intent at time of formation, and thus prove mutual mistake).
Interpretation of a contract is an inquiry into the intent of the parties, beginning with an examination of the language they used to express their agreement. Berg v. Hudesman, 115 Wn.2d 657, 663, 801 P.2d 222 (1990). The contract's nonrefundability clause contemplates the very situation that arose here:
The Agency acknowledges that this warrant will be issued in consideration of Owner's execution of this agreement and that the full amount of such payment shall in all circumstances be nonrefundable to the Agency, irrespective of whether the Agency proceeds with condemnation, whether the above described project is constructed, or the final adjudication of just compensation for the taking of the real property. Clerk's Papers at 221 (emphasis added).
This language is unambiguous. It is evident that the deposit was intended to be nonrefundable regardless of whether condemnation was completed or the monorail built. We need go no further to determine the parties' intent. Syrovy v. Alpine Resources, 122 Wn.2d 544, 551, 859 P.2d 51 (1993) (where contract language is unambiguous, court should not read ambiguity into the contract); Mayer v. Pierce County Medical Bureau, 80 Wn. App. 416, 420, 909 P.2d 1323 (1995) ("'If a contract is unambiguous, summary judgment is proper even if the parties dispute the legal effect of a certain provision.'") (quoting Voorde Poorte v. Evans, 66 Wn. App. 358, 362, 832 P.2d 105 (1992)); see also Absher Constr. Co. v. Kent Sch. Dist. No. 415, 77 Wn. App. 137, 141, 890 P.2d 1071 (1995) (construction of an unambiguous contract is a matter of law).
Even if we look beyond the four corners of the agreement, SMP offered no evidence to refute JREA's declaration that it acceded to immediate possession only because it understood that the deposit payment would be unconditionally nonrefundable, and believed that SMP "recognized . . . a chance the SMP project would not actually happen." Clerk's Papers at 277-79. Unilateral intent is not relevant to contract interpretation, but the JREA declaration is consistent with the parties' conduct and with their written agreement. Go2Net, Inc. v. C I Host, Inc., 115 Wn. App. 73, 84, 60 P.3d 1245 (2003).
Courts may consider the contracting parties' subsequent conduct as evidence of their intent at the time of contracting. Watkins v. Restorative Care Center, Inc., 66 Wn. App. 178, 191, 831 P.2d 1085 (1992) (citing Berg, 115 Wn.2d at 668-69). As late as the summer of 2005, SMP continued to assert the payment's nonrefundability as a defense to JREA's contentions of prejudice resulting from delaying trial.
Further, nothing in the record supports the court's conclusion that a finding of public use and necessity was a condition precedent to enforceability of the nonrefundability clause in the possession and use agreement. The clause itself contemplated the possible demise of the monorail project and thereby anticipated that the public use and necessity for the taking could evaporate. The contract was not voidable.
No reasonable trier of fact could reach any conclusion except that the contract permits JREA to retain the deposit payment despite SMP's failure to complete the condemnation.
We therefore reverse and remand for entry of an order quieting title in JREA. JREA's request for costs and fees under RCW 8.25.075 is granted. We direct the superior court to determine the appropriate fee award, including costs of appeal.