Opinion
No. 52523-9-I.
Filed: June 1, 2004. UNPUBLISHED OPINION
Appeal from Superior Court of King County. Docket No: 02-2-28065-0. Judgment or order under review. Date filed: 05/19/2003. Judge signing: Hon. Linda Lau.
Counsel for Appellant(s), Howard Mark Goodfriend, Edwards Sieh Smith Goodfriend PS, 1109 1st Ave Ste 500, Seattle, WA 98101-2988.
Counsel for Respondent(s), Kirstin S. Dodge, Perkins Coie LLP, The Pse Bldg, 10885 NE 4th St. Ste 700, Bellevue, WA 98004.
Faiz and Laila Kass-Elias (Kass-Elias) entered into an agreement to purchase land from Robert and Debra Cosbey (Cosbey). Confusion arose about the correct closing date during conversations between the parties and their agents. Despite this confusion, Kass-Elias attempted to close on the last possible closing date using a cashier's check. The trial court found as a matter of law that the cashier's check could not be disbursed until the next business day, and thus Kass-Elias violated the terms of the purchase agreement. The trial court granted summary judgment to Cosbey. Kass-Elias appeals on various grounds. We hold that a material issue of fact exists as to whether the parties modified their agreement as to the closing date. We further hold that the trial court erred by finding as a matter of law that the cashier's check did not constitute prompt performance. Therefore, we reverse the order for summary judgment and remand for trial.
I
The evidence, taken in the light most favorable to the appellant, established the following facts.
The Agreement
On December 21, 2001, Faiz and Laila Kass-Elias entered into an agreement to purchase a plot of land in Kirkland created by short platting a larger piece of property owned by Robert and Debra Cosbey. The agreement set a closing date '30 days after recording of Short Plat.' The parties twice amended the original agreement, the second amendment extending the deadline to record the short plat to 'on or before 8/30/02.'
Section k of the agreement provided that '[t]ime is of the essence.' The agreement also provided that if the buyer fails to purchase the property, the buyer forfeits the earnest money to the seller. The purchase price was $320,000. The agreement provided that the 'Buyer agrees to pay to Seller the Purchase Price, including the Earnest Money, in cash at Closing. . . .' The earnest money amount was $15,000. The agreement also provided that ''Closing' means the date on which all documents are recorded and the sale proceeds are available to Seller.'
Notice of the Short Plat's Recording
Cosbey was responsible for submitting the application to short plat the property. He submitted the application in mid-August and learned from the City of Kirkland that the short plat had been recorded on August 20, 2002. He notified Washington Title's escrow agent, Lynne Gasciogne and his agent, Erik Noyd, within the week. He did not notify Kass-Elias, but the agreement did not expressly require Cosbey to give notice of the recording of the short plat to Kass-Elias.
On August 28, 2002, Kass-Elias learned from their agent, Neil Lindquist, that the short plat had been recorded. Lindquist learned about the recording from Noyd.
The Closing Date
After learning that the short plat had been recorded, Faiz Kass-Elias stopped by the property to speak with Robert Cosbey. Kass-Elias was upset that he had not been notified sooner of the recordation. During the conversation, Cosbey insisted that he would not extend the deadline, and stated that Kass-Elias needed to close on or before September 20th. Kass-Elias did not calculate the 30-day period because Cosbey was so adamant about closing on or before the 20th. Kass-Elias repeated this date to Lindquist. Lindquist discussed the September 20th closing date with Noyd, and Noyd did not object or indicate that the closing date had to be on the 19th. Similarly, Cosbey and Noyd repeatedly indicated in conversations with Gasciogne that Cosbey was not willing to extend the closing date, but neither Cosbey nor Noyd indicated a specific date on which the closing must occur.
The Attempt to Close
On September 20, 2002, Kass-Elias delivered a cashier's check for $230,000 to the escrow agent. When Kass-Elias arrived at Washington Title, Gasciogne had already received the loan documents from Kass-Elias' lender. Kass-Elias had already submitted the earnest money to the realtor. Kass-Elias signed both the loan and the closing papers.
Gasciogne contacted Robert Cosbey and asked him to come in to close the deal. Cosbey explained that his wife was not available until Monday, September 23, 2002. He also explained that he needed to use some investment funds to come up with the cash needed to close the transaction. On Monday, Cosbey called Gasciogne and informed her that the agreement had terminated. On that day, Noyd called Lindquist and explained that Cosbey would not close unless Kass-Elias paid more money.
Litigation
Instead of paying more money, Kass-Elias sued Cosbey for specific performance and damages. Cosbey counterclaimed Kass-Elias had forfeited the earnest money by failing to timely close. Cosbey successfully moved for summary judgment and was awarded the $15,000 earnest money and $43,346.07 in attorney fees and costs. Kass-Elias timely appealed.
II
When reviewing an order granting summary judgment, we engage in the same inquiry as the trial court. A summary judgment is appropriate 'if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.' A material fact is one upon which the outcome of the litigation depends, in whole or in part. The court must consider the facts submitted and all reasonable inferences from those facts in the light most favorable to the nonmoving party. But the nonmoving party must set forth specific facts to defeat a motion for summary judgment, rather than rely on bare allegations.
Degel v. Majestic Mobile Manor, Inc., 129 Wn.2d 43, 48, 914 P.2d 728 (1996); Kahn v. Salerno, 90 Wn. App. 110, 117, 951 P.2d 321 (1998).
CR 56(c); Wilson v. Steinbach, 98 Wn.2d 434, 437, 656 P.2d 1030 (1982).
Morris v. McNicol, 83 Wn.2d 491, 494, 519 P.2d 7 (1974).
Clements v. Travelers Indem. Co., 121 Wn.2d 243, 249, 850 P.2d 1298 (1993).
Young v. Key Pharm., Inc., 112 Wn.2d 216, 225-226, 770 P.2d 182 (1989).
Kass-Elias argues that the court should read into the contract an implied obligation of notice. Kass-Elias cites Williston on Contracts to argue that because Robert Cosbey was in control of the short plat recording process, he was obliged to notify Kass-Elias when the short plat was recorded. According to Williston, 'where a party stipulates to do a certain thing in a certain specific event which may become known to him, or with which he can make himself acquainted, he is not entitled to any notice, unless he stipulates for it; but when it is to do a thing which lies within the peculiar knowledge of the opposite party, then notice ought to be given him.'
15 Richard A. Lord Williston on Contracts sec. 48:7 (4th ed. 2000).
15 Lord, supra, at 592 (quoting Vyse v. Wakefield, 6 MW (Eng.) 442 (1840)).
Although Cosbey did have complete control over the process of submitting the application for the short plat, he did not have peculiar knowledge of when the recording had occurred. The records are public. But Kass-Elias argues that without notice, they did not benefit from a full 30 days of notice. Kass-Elias' argument fails because the agreement states that the parties agreed to close the transaction 'not later than 30 days following recording of the short plat' and not 30 days following notice of the recording of the short plat. Kass-Elias does not provide evidence that the parties bargained for 30 days of notice. The court did not err in rejecting Kass-Elias' request to impose a notice requirement on Cosbey. Thirty days after the recording of the short plat was September 19, 2002. But Faiz Kass-Elias asserts that the parties modified the closing date when Robert Cosbey stated the closing date was September 20th, and he responded to Cosbey that September 20th would not be a problem. Kass-Elias also stated that he repeated the September 20th date to his agent who in turn mentioned the date to Cosbey's agent, and Cosbey's agent did not object. Taking the facts in a light most favorable to Kass-Elias as the nonmoving party, a statement by Cosbey led Kass-Elias into relying on a closing date of September 20th. An issue of material fact regarding modification of the contract exists.
Robert Cosbey denies that he said September 20th was the closing date. His agent, Noyd, states that he does not recall Lindquist ever mentioning September 20th as the closing date. Both Cosbey and Noyd note that Cosbey repeatedly stated he would not modify the closing date. These factual discrepancies should be submitted to a jury to consider.
Cosbey relies on Skagit State Bank v. Rasmussen, to argue that Kass-Elias did not have the right to rely on him or his agent to inform them of the correct closing date. In Skagit State Bank, the court held that a party to a contract cannot rely upon another party's unintentional misrepresentation about the contents of the contract when the relying party could have read and understood the contract himself. But Skagit State Bank involved interpretation of terms from a written contract and its written addendum, not an alleged oral modification of a contract. The holding in Skagit State Bank does not assist us in determining whether the closing date was orally modified.
109 Wn.2d 377, 745 P.2d 37 (1987).
Skagit State Bank, 109 Wn.2d at 381-82.
Skagit State Bank, 109 Wn.2d at 382-83.
Cosbey argues that under the doctrine of waiver, he could not have waived his contractual right to have the sales agreement close on or before September 19th. But Kass-Elias does not merely argue that Cosbey waived the closing date. Kass-Elias argues that the parties modified it. Because Kass-Elias alleges that a new closing date was chosen, we do not find a waiver analysis helpful.
Cosbey argues a failure of consideration, because Kass-Elias was unwilling to pay more money. But Kass-Elias is able to show consideration because 'the reciprocal surrender of contractual rights constitutes consideration.' Kass-Elias gave up the deadline as well as Cosbey, regardless of what offers were turned down.
Crown Plaza Corp. v. Synapse Software Systems, Inc., 87 Wn. App. 495, 502, 962 P.2d 824 (1997).
Cosbey also argues that the Statute of Frauds bars the oral modification of the closing deadline. In Washington, 'a contract which the statute [of frauds] requires to be in writing cannot be abrogated or rescinded by a subsequent oral contract, unless such oral contract is accompanied by acts of part performance sufficient to remove the requirement that it shall be in writing.' But '[i]t is well settled . . . that an agreement required by law to be made in writing may be modified or abrogated by a subsequently executed oral agreement.'
Woolen v. Sloan, 94 Wn. 551, 553, 162 P. 985 (1917).
Kelly Springfield Tire Co. v. Faulkner, 191 Wn. 549, 554, 71 P.2d 382 (1937).
In Gerard-Fillio Co. v. McNair, our Supreme Court declared that executed oral modifications of written contracts should be enforced because '[t]o hold otherwise is to make the statute of frauds an instrument of fraud; for it would be fraud to allow a person to enforce a contract which he had agreed on sufficient consideration to modify or abrogate after he has accepted the consideration for its modification or abrogation.' If Cosbey did modify the closing date by his statement and subsequent conduct, and Kass-Elias relied on the new date, the oral modification should be enforced.
68 Wn. 321, 123 P. 462 (1912).
Gerard-Fillio, 68 Wash. at 327.
Cosbey also argues that Kass-Elias simply has not presented enough evidence to prove that a meeting of the minds occurred such that the closing date was modified by mutual agreement. This final point presents a question for the jury and not an argument to sustain a summary judgment. In granting summary judgment to Cosbey, the trial court found that Kass-Elias breached the contract by not providing 'funds in a form that would be available by the close of business on the closing date.' Kass-Elias submitted a cashier's check of $230,000 and signed all documents in escrow. Kass-Elias also arranged for a loan and the lender was ready to wire $80,000. The remainder of the purchase price was to come from the $15,000 earnest money being held by the realtor.
Although the earnest money was not requested on the 20th because the seller was not going to sign, the escrow agent stated that the excess earnest money check could be obtained by courier the same day it was requested. Cosbey did not question the availability of the loan money on the closing date.
Cosbey pointed out that the escrow company responsible for closing the transaction notified both parties that cashier's checks are 'generally available for disbursement on the next business day following the day of deposit.' But the escrow company did not require cashier's checks to be submitted the day before closing, nor did the escrow company state that cashier's checks could not be made available for disbursement on the day of receipt.
In Washington, cashier's checks are recognized as the equivalent of cash. Cashier's checks are 'issued by the authorized officer of a bank, directed to another person, evidencing the fact that the payee is authorized to demand and receive from the bank, upon presentation, the amount of money represented by the check.' It is possible that funds from a cashier's check would not be available on the same day if the check were delivered too late in the day or if the bank were inconveniently located. But Kass-Elias delivered the check at about 10 a.m. and Washington Mutual Bank was the authorized bank. A delivery at 10 a.m. leaves plenty of time and Washington Mutual has numerous conveniently located branches. Although the funds presented by Kass-Elias might not have been available for disbursement on the 20th, based on this record, the trial court could not have concluded as a matter of law that the funds were not available. We therefore reverse the summary judgment and remand for trial. Based on our reversal of summary judgment, we also reverse the award of fees to Cosbey. An award of attorney fees to the prevailing party must await the outcome on remand
See RCW 62A.3-310(a); Crunk v. State Farm Fire Cas. Co., 106 Wn.2d 23, 28, 719 P.2d 1338 (1986).
Crunk, 106 Wn.2d at 27 (quoting 10 Am.Jur.2d Banks sec. 544, at 518-19 (1963)).
We award reasonable attorney fees and expenses for the appeal to Kass-Elias. 'A contractual provision for an award of attorney's fees at trial supports an award of attorney's fees on appeal under RAP 18.1.' Subsection p of the Agreement requires that 'the prevailing party is entitled to reasonable attorneys' fees and expenses.' Therefore, as the prevailing party on appeal, Kass-Elias is entitled to attorney fees and expenses.
West Coast Stationary Eng'rs Welfare Fund v. City of Kennewick, 39 Wn. App. 466, 477, 694 P.2d 1101 (1985).
REVERSED AND REMANDED.
ELLINGTON and KENNEDY, JJ., concur.