In Re The Estate Of Terry Lee Smith, V. Steve Hovander, Et Ano ( 2021 )

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DIVISION ONE
JULIE TADLOCK, Personal ) No. 81895-3-I
Representative of the ESTATE OF )
TERRY L. SMITH, )
)
Respondent, )
)
v. )
)
)
STEVE HOVANDER and STARLARE ) UNPUBLISHED OPINION
HOVANDER, husband and wife, and )
all others occupying 3591 Lynden-Birch )
Bay Road (a/k/a 3591 Birch Bay Lynden )
Road), Custer, Washington 98240, )
)
Appellants. )
)
VERELLEN, J. — If a tenant defends against a residential unlawful detainer
action by arguing that they have the right to possession of the property based
upon a purchase and sale agreement, then the unlawful detainer proceeding
properly includes a determination whether that agreement provides the tenant the
right to possession of the property. And the probate court considering the tenant’s
complaint seeking specific performance of the purchase and sale agreement does
not abuse its discretion by noting the decision from the unlawful detainer
proceeding but then conducting an independent analysis.
Here, the lack of a valid legal description in the purchase and sale
agreement, coupled with the Hovanders’ failure to satisfy the feasibility
No. 81895-3-I/2
contingency, supported the trial court’s conclusion that the Hovanders did not have
a right to possession based upon a purchase and sale agreement. And because
the probate court conducted an independent analysis, it did not abuse its
discretion in concluding that specific performance was not warranted.
As the prevailing party on appeal, the Estate is entitled to attorney fees
under the lease and the purchase and sale agreement.
Therefore, we affirm.
FACTS
Terry and Sharon Smith owned commercial agricultural real property in
Birch Bay, Washington. On March 8, 2013, the Smiths leased the property to
Starlare and Steve Hovander1 pursuant to a commercial lease agreement.
The lease term began on May 1, 2013, and ended on September 30, 2015.
The Hovanders held over and stopped paying rent in December 2017, but they
continued to occupy the premises.
In July 2018, the Smiths died. Shortly after, Julie Tadlock was appointed as
the personal representative of the Smith Estate.
On September 26, 2019, the Estate posted a 20-day notice to terminate the
tenancy. To comply with the 20-day notice, the Hovanders were instructed to
surrender the property to the Estate by October 31. On November 27, the Estate
1 We occasionally refer to the Hovanders by their first names for clarity.
2
No. 81895-3-I/3
filed an unlawful detainer action alleging that the Hovanders failed to “vacate the
[p]roperty.”2
On May 28 and June 1, 2020, the trial court conducted a show cause
hearing.3 At the hearing, the court heard testimony from Julie Tadlock, her
mother, the real estate broker Haruichi Bearden, and Starlare Hovander. The
Hovanders argued that they were entitled to possession of the property based on
a purchase and sale agreement that was executed by the Hovanders and the
Smiths in February 2018. The Estate responded by contesting the validity of the
purchase and sale agreement.
In July 2020, the court entered findings of fact and conclusions of law. The
court focused on four sections of the purchase and sale agreement. Specifically,
the court determined that the agreement did not contain an adequate legal
description, that the Hovanders failed to comply with the feasibility contingency
and the earnest money provision, and that the agreement failed to specify any
closing date.
As a result, the court concluded that the purchase and sale agreement was
“invalid and unenforceable” and did “not give the Hovanders a right to possess the
property.”4 The trial court denied the Hovanders’ motion for reconsideration. In
2 Clerk’s Papers (CP) at 77-80, 693, finding of fact 7.
3
The show cause hearing was postponed multiple times due to the Covid-
19 pandemic.
4 CP at 696, conclusion of law 8.
3
No. 81895-3-I/4
October 2020, the court issued a writ of restitution directing the sheriff to restore
possession of the property to the Estate.5
While the unlawful detainer action was pending, on May 6, 2020, in the
probate of the Estate, the Hovanders filed a petition for specific performance of the
purchase and sale agreement. The Hovanders noted a hearing on their petition
for May 29, 2020. That August, the court entered an order denying the
Hovanders’ petition for specific performance.
The Hovanders appeal the order granting the Estate a writ of restitution, the
order denying the Hovanders specific performance, and the order awarding the
Estate attorney fees and costs.
ANALYSIS
I. Unlawful Detainer
The Hovanders argue that in the unlawful detainer action the trial court
erred in finding that the purchase and sale agreement was invalid and
unenforceable. Specifically, the Hovanders contend that the “factual and legal
bases for [the trial court’s] ruling [were] insufficient.”6 We disagree.
We review a “trial court’s decision following a bench trial by asking whether
substantial evidence supports the findings and whether the findings support the
The trial court postponed issuance of the writ of restitution until “on or after
5
December 10, 2020” due to the Covid-19 pandemic. CP at 739.
6 Appellant’s Br. at 4.
4
No. 81895-3-I/5
court’s conclusions of law.”7 Substantial evidence is evidence sufficient to
persuade a fair-minded person of the truth of the finding.8 We consider
unchallenged findings verities on appeal.9 We review mixed questions of law and
fact and pure questions of law de novo.10
“An unlawful detainer action under RCW 59.12.030 is a summary
proceeding designed to facilitate the recovery of possession of leased property;
the primary issue for the trial court to resolve is the ‘right to possession’ as
between a landlord and a tenant.”11 After filing for unlawful detainer, a landlord
seeking possession of the property “must request a writ of restitution and note the
request for a show cause hearing.”12
“To obtain a writ of restitution at a show cause hearing, the landlord must
establish by a preponderance of the evidence that the tenant violated or breached
material terms of the lease and, thus, the landlord is entitled to immediate
possession of the property pending a final judgment.”13
7 Casterline v. Roberts, 168 Wn. App. 376, 381, 284 P.3d 743 (2012).
8 Id.9 Id.10City of Fed. Way v. Town & Country Real Estate, LLC, 161 Wn. App. 17,
41, 252 P.3d 382 (2011), as corrected (May 10, 2011); Casterline, 168 Wn. App.
at 381.
11 Angelo Prop. Co., LP v. Hafiz, 167 Wn. App. 789, 808, 274 P.3d 1075(2012).
12Webster v. Litz, No. 81547-4-I, slip op. at 4 (Wash. Ct. App. July 16,
2021), https://www.courts.wa.gov/opinions/pdf/815474.pdf.
13 Id.5
No. 81895-3-I/6
“Purchase and sale agreements . . . are contracts ‘whereby essentially an
owner promises to convey, and the purchaser to pay . . . for real estate.’” 14 When
interpreting a contract, we give “undefined terms their plain, ordinary, and popular
meaning.”15 The “goal is to interpret the agreement in a manner that gives effect
to all the contract’s provisions.”16 “A contract to enter into a future contract must
specify all of its material and essential terms, and leave none to be agreed upon
as the result of future negotiations.17
Our Supreme Court has outlined 13 material terms of a real estate contract:
(a) time and manner for transferring title; (b) procedure for declaring
forfeiture; (c) allocation of risk with respect to damage or destruction;
(d) insurance provisions; (e) responsibility for: (i) taxes, (ii) repairs, (iii)
water and utilities; (f) restrictions, if any, on: (i) capital improvements, (ii)
liens, (iii) removal or replacement of personal property, and (iv) types of
use; (g) time and place for monthly payments; and (h) indemnification
provisions.[18]
To comply with the statute of frauds, contracts for the sale or conveyance of real
property must include a legal description.19
14Geonerco, Inc. v. Grand Ridge Props. IV LLC, 146 Wn. App. 459, 465,
191 P.3d 76 (2008) (second ellipsis in original) (quoting 18 W ILLIAM B. STOEBUCK
AND JOHN W. W EAVER, W ASHINGTON PRACTICE: REAL ESTATE: TRANSACTIONS § 16.1,
at 215 (2d ed. 2004)).
15
Nishikawa v. U.S. Eagle High, LLC, 138 Wn. App. 841, 849, 158 P.3d
1265 (2007) (citing Kitsap County v. Allstate Ins. Co.,136 Wn.2d 567, 576, 964
P.2d 1173 (1998)).
16
Id. (citing Mayer v. Pierce County Med. Bureau, Inc., 80 Wn. App. 416,
423, 909 P.2d 1323 (1995)).
17 Hubbell v. Ward, 40 Wn.2d 779, 785, 246 P.2d 468 (1952).
18 Kruse v. Hemp, 121 Wn.2d 715, 722, 853 P.2d 1373 (1993).
19 Pardee v. Jolly, 163 Wn.2d 558, 566-67, 182 P.3d 967 (2008).
6
No. 81895-3-I/7
The Hovanders do not challenge any of the trial court’s findings related to
the purchase and sale agreement, making them verities on appeal.20 Instead, the
Hovanders contest the court’s conclusions of law that lead to the court’s ultimate
determination that the purchase and sale agreement was invalid and
unenforceable.
First, the Hovanders challenge conclusion of law 6, that “[t]he evidence at
trial did not establish that the [purchase and sale agreement] contained a legal
description of the real estate to be purchased and sold, as an agreement term or
an attached deed.”21
The testimony at trial centered on the following documents related to the
purchase and sale agreement: the sale and listing agreement between the real
estate agency and the Smiths, the 2018 purchase and sale agreement in which
every page was initialed by the Smiths and the Hovanders, including an attached
but blank “Exhibit A [legal description],” an addendum to the 2018 purchase and
sale agreement, a Chicago Title parcel information sheet, a 2005 statutory
warranty deed from the Staubs22 to the Smiths in which someone handwrote
20Cowiche Canyon Conservancy v. Bosley, 118 Wn.2d 801, 808, 828 P.2d
549 (1992). For the first time in their reply brief, the Hovanders specifically
challenge finding of fact 20 that “[t]he PSA contains no legal description of the land
that was to be purchased and sold to the Hovanders by the Smiths.” Appellant’s
Reply Br. at 5. We need not consider arguments raised for the first time in a reply
brief. Bergerson v. Zurbano, 6 Wn. App. 2d 912, 926, 432 P.3d 850 (2018).
21 CP at 696, conclusion of law 6.
22 The Staubs were the owners of the property before the Smiths.
7
No. 81895-3-I/8
“Exhibit A” across the top, and a Chicago Title copy of an aerial photograph and
plat map.
The Hovanders rely upon the 2005 statutory warranty deed as the “Exhibit
A” legal description for the purchase and sale agreement. But the 2005 deed is
signed only by the Staubs and is initialed only by the Smiths. The deed was never
initialed by the Hovanders. The record on appeal does not reveal who handwrote
“Exhibit A” across the top of the deed. And the record reveals great uncertainty
about where and for what purpose that “Exhibit A” was included in the documents
submitted at trial. For example, in the record, combinations of the above
documents are attached as exhibits to Bearden’s declaration, Starlare’s
declaration, and Tadlock’s deposition, but within each group of attachments, the
individual exhibits are arranged in a different order.23
Specifically, in the attachments to Bearden’s declaration, the exhibit that
follows the listing agreement is a copy of the 2005 statutory warranty deed
conveying the property from the Staubs to the Smiths.24 The 2005 deed was
never initialed by the Hovanders, and there is no evidence who handwrote “Exhibit
A” at the top of that copy of the deed. At trial, Bearden testified that the legal
description was “at the top” of the purchase and sale agreement and that the 2005
statutory warranty deed containing the legal description was “attached in the
middle” of the purchase and sale agreement and the listing agreement when he
23 See CP at 25-57, CP at 311-44, and CP at 564-620.
24 CP at 40.
8
No. 81895-3-I/9
“sent out” the documents.25 Bearden’s testimony implies that the 2005 deed was
“attached” to the purchase and sale agreement, but he did not offer any
explanation why the Hovanders did not initial that copy of the deed if it was
intended as an attached legal description to the purchase and sale agreement.
And the listing agreement between the Smiths’ and Bearden’s real estate agency
provides that the property is “legally described on the attached Exhibit A.”26
Bearden offers no explanation why the attached “Exhibit A” statutory warranty
deed was not instead intended as an exhibit attached to the listing agreement.27
In the attachments to Starlare’s declaration, the copy of the 2005 statutory
warranty deed conveying the property from the Staubs to the Smiths follows the
Chicago Title parcel information sheet.28 This copy of the deed was also never
initialed by the Hovanders and has the same handwritten “Exhibit A” at the top of
the document.29
And in the attachments to Tadlock’s deposition, the copy of the 2005
statutory warranty deed conveying the property from the Staubs to the Smiths
follows the 2018 purchase and sale agreement with an attached but blank “Exhibit
25 Report of Proceedings (May 28, 2020) at 183.
26 CP at 35.
27 CP at 40.
28 CP at 339-40.
29 CP at 340.
9
No. 81895-3-I/10
A [legal description].”30 This copy of the deed was also never initialed by the
Hovanders and has the same handwritten “Exhibit A” at the top of the document. 31
The only place in the record in which the 2005 statutory warranty deed
directly follows the blank “Exhibit A [legal description]” is in the exhibits attached to
Tadlock’s deposition.32 Most importantly, the Hovanders have not provided the
actual exhibits as they were admitted at the unlawful detainer hearing. And they
have the burden of providing an adequate record for appeal.33
Because the equivocal evidence in the record does not necessarily
establish that the copy of the 2005 statutory warranty deed from the Staubs to the
Smiths was attached as an exhibit to the purchase and sale agreement, the trial
court as the fact finder could conclude that the purchase and sale agreement
included the blank “Exhibit A [legal description]” but that the 2005 deed was not
included in or attached as Exhibit A to the actual physical purchase and sale
agreement. The court was not compelled to accept that the 2005 deed never
initialed by the Hovanders was attached as Exhibit A to the purchase and sale
agreement.
The court’s unchallenged finding of fact that the purchase and sale
agreement “contains no legal description of the land that was to be purchased and
30 CP at 619.
31 Compare CP at 40, CP at 340, and CP at 619.
32 Id.33 Story v. Shelter Bay Co., 52 Wn. App. 334, 345, 760 P.2d 368 (1988).
10
No. 81895-3-I/11
sold to the Hovanders by the Smiths”34 supports the trial court’s conclusion that
“[t]he evidence at trial did not establish that the [purchase and sale agreement]
contained a legal description of the real estate to be purchased and sold as an
agreement term or an attached deed.”35 The purchase and sale agreement was
not valid or enforceable for lack of a legal description.
The Hovanders also challenge conclusion of law 4, that “[t]he evidence at
trial did not establish that the Hovanders” satisfied the feasibility contingency. 36
Section 5 of the purchase and sale agreement stated, in part, “This
Agreement shall terminate and Buyer shall receive a refund of the earnest money
unless Buyer gives written notice to Seller within [30 days] of Mutual Acceptance
stating that this condition is satisfied.”37 The court found there was no evidence
that the “Hovanders provided written notice in conformance with these provisions
that the feasibility contingency was satisfied.”38
The Hovanders do not dispute that they never provided written notice to
satisfy the contingency; rather, they argue that the contingency did not need to be
satisfied for the agreement to be enforceable because it “was simply part of a
standard-form contract that had no application to the purchase and sale”
34 CP at 695, finding of fact 20.
35 CP at 698, conclusion of law 6.
36 CP at 696, conclusion of law 4.
37 CP at 8.
38 CP at 695, finding of fact 22.
11
No. 81895-3-I/12
agreement.39 Even though the Hovanders had been using the property as tenants
for several years, the feasibility contingency is a material term of the contract. As
a result, the Hovanders’ failure to satisfy this term of the agreement also supports
the trial court’s conclusion that the purchase and sale agreement was “invalid and
unenforceable.”40
The inconsistent placement of the 2005 deed in relation to the purchase
and sale agreement, coupled with the trial court’s unchallenged finding regarding
the lack of legal description and the Hovanders’ failure to satisfy the feasibility
contingency, supported the court’s ultimate conclusion of law that the purchase
and sale agreement was “invalid and unenforceable.”41
39 Appellant’s Br. at 30.
40 The Hovanders argue that after leasing the property for several years the
“feasibility” of the property was not in question. Id. at 30-31. But, on this record,
the trial court was not compelled to ignore this material term. The failure to satisfy
this term of the agreement was also a reason for the trial court to conclude that the
purchase and sale agreement was not a valid basis for a claim of right to
possession.
41 The trial court also relied on two other sections of the purchase and sale
agreement, the earnest money provision and the lack of any specified closing
date, in concluding that the agreement was invalid and unenforceable. But those
provisions are less compelling. The Hovanders’ failure to deliver or pay the $100
promissory note as an escrow amount is resolved by the court’s finding of fact 21,
which states that “[t]he evidence at trial did not indicate that this payment was
made.” CP at 695. And as to the lack of any closing date in a purchase and sale
agreement, there is at least some authority that a court may impose a reasonable
closing date. Turner v. Gunderson, 60 Wn. App. 696, 703, 807 P.2d 370 (1991).
Because the lack of a legal description and failure to satisfy the feasibility
contingency clearly support the trial court’s conclusion that the Hovanders failed to
establish a right to possession based upon the purchase and sale agreement, we
need not give further attention to the escrow and closing date provisions.
12
No. 81895-3-I/13
The Hovanders argue that the court erred in finding the purchase and sale
agreement “invalid and unenforceable” and granting the Estate a writ of restitution
because doing so “was outside the limited unlawful detainer jurisdiction of the
Court.”42 But the sole purpose of an unlawful detainer action is to “resolve” who
has “the right to possession of the property.”43 Here the “validity” and
“enforceability” of the purchase and sale agreement directly affected the “right of
possession.” And because the Estate established by a preponderance of the
evidence that the purchase and sale agreement was “invalid and unenforceable,”
the court properly issued a writ of restitution.
The Hovanders next contend that because the Smiths created the terms of
the purchase and sale agreement, the Estate is “estopped from denying the
contract as the terms were laid out by the Smiths, not by the Appellants
Hovander.”44 But the Hovanders did not raise this argument at trial. The first time
the Hovanders raised an estoppel argument was in their motion for
reconsideration. “Generally, a party is not permitted to present new argument
based on new authority on a motion for reconsideration.”45 And the Hovanders did
42 Appellant’s Br. at 4.
43 Angelo Prop. Co., LP v. Hafiz, 167 Wn. App. 789, 808, 274 P.3d 1075(2012) (internal quotation marks omitted).
44 Appellant’s Br. at 23.
45 Linth v. Gay, 190 Wn. App. 331, 342 n.11, 360 P.3d 844 (2015).
13
No. 81895-3-I/14
not appeal the court’s denial of their motion for reconsideration. The Hovanders’
estoppel argument is not compelling.46
II. Probate
The Hovanders contend that in the probate of the Estate the trial court
committed a procedural error and, as a result, incorrectly denied them specific
performance of the purchase and sale agreement. We review the denial of
specific performance for an abuse of discretion.47 A trial court abuses its
discretion if its decision is based on untenable grounds or untenable reasons. 48
“Generally, the court has discretion to allow a buyer specific performance of
a real estate purchase agreement.”49 “To obtain specific performance, a party
must present clear and unequivocal evidence that ‘leaves no doubt as to the
terms, character, and existence of the contract.’”50
Initially, the Hovanders argue that the probate court erred in denying them
specific performance because that court merely adopted the unlawful detainer
46 In their opening brief, the Hovanders also argue that the Estate breached
its implied duty of good faith and fair dealing by attempting to “withhold” the
agreement making the “provision as to earnest money illusory.” Appellant’s Br. at
22. But in their reply brief, the Hovanders acknowledge that their implied duty of
good faith and fair dealing argument was “not raised at all as [an] actual issue[ ].”
Appellant’s Reply Br. at 7. As a result, we decline to address this issue.
Cornish Coll. of the Arts v. 1000 Virginia Ltd. P’ship, 158 Wn. App. 203,
47
221, 242 P.3d 1 (2010).
48 Id.49 Paradiso v. Drake, 135 Wn. App. 329, 335, 143 P.3d 859 (2006).
50 Id. (internal quotation marks omitted) (quoting Kruse, 121 Wn.2d at 722).
14
No. 81895-3-I/15
court’s conclusion regarding the purchase and sale agreement instead of
conducting an independent analysis. They are mistaken.
In denying the Hovanders’ motion for specific performance, the probate
court acknowledged, “The court takes notice that in the referenced cause number
the same issue of enforcement of the real estate contract was addressed in the
unlawful detainer action.”51 The probate court concluded that in “reviewing the
record in the current matter, I reach the same decision as Judge Garrett,” the
judge in the unlawful detainer proceeding.52 But the probate court also conducted
an independent analysis of the purchase and sale agreement.
In particular, the court noted that a contract “must contain all of the material
and essential terms” in order for the court to consider specific performance and
that the Hovanders had the burden of establishing by “‘clear and unequivocal’”
evidence that the contract left “‘no doubts as to the terms, character, and
existence of the contract.’”53 Because the lack of a legal description, coupled with
the Hovanders’ failure to satisfy the feasibility contingency, left “doubts” regarding
the enforceability of the purchase and sale agreement, the Hovanders failed to
meet their burden. And because the probate court conducted an independent
51 CP at 173.
52 Id.53 CP at 174 (quoting Kruse, 121 Wn.2d at 722).
15
No. 81895-3-I/16
analysis, it did not abuse its discretion by denying the Hovanders specific
performance.54
III. Fees on Appeal
The Estate requests attorney fees on appeal. The lease and the purchase
and sale agreement both provide for attorney fees to the prevailing party in
litigation. Because the Estate prevails on appeal, it is entitled to attorney fees on
appeal, subject to compliance with RAP 18.1(d).
Therefore, we affirm.
WE CONCUR:
54 The Hovanders also contend that the probate court inadequately
considered specific performance because it is “obvious that there was no
discovery,” and the Hovanders were allowed only one brief to support their
position. Appellant’s Br. at 32-33. But there is no indication in the record on
appeal that the Hovanders ever requested discovery or permission to submit
additional briefing in the probate matter.
16