|
PUBLISHED IN PART. DO NOT CITE UNPUBLISHED PORTION. SEE GR 14.1(a).
Court of Appeals Division III
State of Washington
Opinion Information Sheet
| Docket Number: |
29683-1 |
| Title of Case: |
Patrick H. Kofmehl v. Baseline Lake, LLC |
| File Date: |
04/12/2012 |
SOURCE OF APPEAL
----------------
| Appeal from Grant Superior Court |
| Docket No: | 08-2-01242-1 |
| Judgment or order under review |
| Date filed: | 01/11/2011 |
| Judge signing: | Honorable Evan E Sperline |
JUDGES
------
| Authored by | Laurel H. Siddoway |
| Concurring: | Stephen M. Brown |
| Teresa C. Kulik |
COUNSEL OF RECORD
-----------------
Counsel for Appellant(s) |
| | George M Ahrend |
| | Ahrend Law Firm PLLC |
| | 100 E Broadway Ave |
| | Moses Lake, WA, 98837-1740 |
Counsel for Respondent(s) |
| | Michael R Tucker |
| | Dunn & Black PS |
| | 111 N Post St Ste 300 |
| | Spokane, WA, 99201-0907 |
FILED
April 12, 2012
In the Office of the Clerk of Court
WA State Court of Appeals, Division III
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
PATRICK H. KOFMEHL, an No. 29683-1-III
individual, )
)
Respondent, )
) Division Three
v. )
)
BASELINE LAKE, LLC, a Washington )
limited liability company, ) OPINION PUBLISHED
) IN PART
Appellant. )
)
Siddoway, A.C.J. -- When a purchase and sale agreement is determined to be void
under the statute of frauds, the court may grant rescission and award restitution, restoring
the parties to their precontractual positions. But a purchaser who relies on the statute of
frauds to avoid the contract may not obtain restitution if the vendor is ready, willing, and
able to perform as agreed. Home Realty Lynnwood, Inc. v. Walsh, 146 Wn. App. 231,
240, 189 P.3d 253 (2008). This appeal requires that we address an issue not explicitly
addressed in prior cases applying this rule, namely, who bears the burden of proof of
establishing whether the vendor is ready, willing, and able to perform? We hold that
No. 29683-1-III
Kofmehl v. Baseline Lake, LLC
establishing that the vendor was not ready, willing, and able to perform is an essential
part of the vendee's proof of a right to restitution. Because the trial court erred in
imposing the burden on the vendor, we reverse its orders granting summary judgment and
attorney fees to Patrick Kofmehl and remand the case for further proceedings.
FACTS AND PROCEDURAL BACKGROUND
At issue in this case is a portion of a parcel of real property now located in
Quincy, Washington, following its annexation in 2007. The full parcel consists of
approximately 43 acres described as farm unit (FU) 182, block 73, in Grant County. In
January 2007, Baseline Lake LLC, the owner of the property, entered into a listing
agreement to sell up to 30.12 acres, for which its asking price was $1.6 million. In listing
the property it indicated its willingness to sell the 30.12 acres in smaller parcels of 17.40
acres and 12.72 acres at prorated prices. It withheld the remaining 13 acres from the
listing, intending to build a private school on a 3.93-acre parcel in the northwest corner.
It had no immediate plans for the south 9.04 acres of the property, which is subject to an
easement for an irrigation canal.
Patrick Kofmehl was one of the parties interested in the listed property; he hoped
to acquire it for residential development. Before entering into the agreement that is the
subject matter of this dispute, Mr. Kofmehl and his broker, Michael Nicholson, were
provided with a survey map that depicted the entire 43 acres owned by Baseline. The
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survey, to which Mr. Nicholson added the highlighted border, depicted the portions of
FU 182 as follows:
Clerk's Papers (CP) at 107.
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On March 9, 2007, Mr. Kofmehl executed a proposed real estate purchase and sale
agreement by which he offered Baseline $1.5 million for property that his proposed
purchase and sale agreement described as follows:
This Agreement covers the following described real estate in the City of
Quincy, County of Grant, Washington; commonly known as Approximately
30.12 acres of vacant land situated between 10th Avenue & 13th and legally
described as follows: all inside and a part of FU 182, Block 73, Columbia
Basin Project, Grant County Tax Parcel number 20-0838-000.
CP at 84 (parentheticals omitted). The March 2007 proposed purchase and sale
agreement stated that the offer was subject to the following terms and conditions:
1. Review & approval of the property and [its] lot lines by the
purchaser within two weeks of acceptance of this offer by the seller.
2. Final annexation into the City of Quincy by the City of Quincy.
3. Seller agrees to pay to purchaser "late comer fees" of $29,475.00
to the purchase if seller chooses to develop the 3.93 acres he has excluded
from the overall parcel number shown above.
5 [sic]. If seller decides not to develop the 3.93 acres he will give
this purchaser a 45-day (after seller decides not to develop the 3.93 acres)
right of first refusal on that land at a price equal to what the purchaser is
paying per square foot for the 30.12 acres included in this offer.
Id. The offer was not accepted. Given market conditions at the time and competing
offers for the property, Baseline amended its listing agreement on March 20, 2007 to
increase the asking price to $1.65 million.
After further offers, Mr. Kofmehl and Baseline entered into a purchase and sale
agreement on April 17, 2007 (the Agreement), by which Mr. Kofmehl agreed to purchase
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Kofmehl v. Baseline Lake, LLC
the property at the asking price of $1.65 million. The Agreement was prepared for the
most part by Mr. Kofmehl's broker, Mr. Nicholson, who added typewritten terms to a
form real estate purchase and sale agreement. Mr. Kofmehl added one handwritten
condition of his own before the Agreement was presented to and accepted by Baseline.
The provision of the Agreement describing the real estate covered by the
Agreement was not identical to the description of the real estate covered by the March 7
purchase and sale proposal. Instead of speaking of 30.12 acres "all inside and a part of
FU 182, Block 73" it described the property as follows:
Approximately 30.12 acres of vacant land situated between 10th Avenue
and 13th and legally described as follows: All included inside of FU 182,
Block 73, Columbia Basin Project, Grant CO Tax Parcel # 20-0838-000.
CP at 75. The terms and conditions of the March 7 purchase and sale proposal dealing
with the 3.93 acres in the northwest corner (addressing Baseline's future development or
decision not to develop that parcel) were dropped.
In addition to including the property description, Mr. Nicholson added the
following typewritten terms and conditions to the Agreement:
$ 50,000.00 Earnest money as shown above in the form of a check to be
deposited with [Baseline's broker's] Trust Account upon
mutual acceptance of this agreement. Said Earnest money
to become non-refundable upon Final annexation of this
property into the City of Quincy, Washington and is to be
released to the seller at that time.
$1,600,000.00 Additional cash at closing.
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Offer to purchase subject to the following terms and conditions:
1. Purchaser receiving preliminary plat approval from the City of Quincy.
2. Purchaser closing this sale within five business days after preliminary
plat approval from the City of Quincy.
3. Both purchaser & seller may participate in a 1031 exchange at no cost to
the nonparticipating party.
Id. Mr. Kofmehl added the following handwritten paragraph to the terms and conditions
included by his broker:
4. Accessibility of City sewer.
Id.
Baseline obtained annexation and preliminary approval of its short plat within a
month after the Agreement was signed. On May 8, 2007, Baseline's broker, Curt Morris,
faxed confirmation of annexation and preliminary approval to Mr. Nicholson as support
for release of the $50,000 earnest money. Mr. Morris's transmittal of the proposed short
plat stated:
DONE!
Let's go to phase II.
I shall have the letter from the City this week satisfying item # 4. Earnest
money to be deposited May 9th. I'll get title report coming.
Any help I can give in regards to this plat let me know but it should be all
engineering from now.
CP at 352. The proposed short plat forwarded to Mr. Nicholson identified the 30.12
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No. 29683-1-III
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acres depicted on the earlier-provided survey map as 12.72-acre and 17.40-acre parcels as
a unitary "Lot 1." CP at 353. The excluded northwest 3.93 acres and southern 9.07 acres
were now depicted as "Lot 2" and "Lot 3," respectively. Id. Other than those revised
identifications, the depiction of the northwest 3.93 acres, the southern 9.07 acres, and the
30.12 acres offered for sale was virtually identical, if not identical, to the survey map
originally provided.
In light of the annexation, Mr. Morris released the earnest money deposit to
Baseline on May 9 as advised in his May 8 transmittal. Mr. Kofmehl raised no objection
at that time.
Also on May 9, 2007, the mayor of Quincy provided Mr. Morris with a letter
referencing "Sewer Availability," which stated:
In response to your question this morning, May 9, 2007, you asked about
the availability of sewer for the property recently annexed to the City and
referred to as Baseline Lake, LLC Annexation lying east of County Road R
NW and south of Lauzier Park. This property could be served either north
or east subject to engineering.
The City would be happy to assist a developer in planning of sewer service
to this Property. If you have any other concerns please contact the City.
CP at 334.
The Agreement included a closing date of April 15, 2008, almost a year out. On
April 13 or 14, 2008, the parties extended the closing date by 45 days. Their addendum
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carried forward the description of the property contained in the Agreement and stated:
Both parties to this agreement hereby agree to extend the closing date to
June 1, 2008 (45 days) so that they can complete the negotiations regarding
sewer & water cost sharing and any other negotiations regarding the 3.93
acres that the seller wants to build a private school on.
CP at 78. Baseline alleges that the "negotiations" referred to by the addendum were with
a view to Mr. Kofmehl purchasing Lot 2 in addition to Lot 1, or, if not, to possible cost-
sharing by the parties in bringing water and sewer to their respective properties. The
closing date was extended again, to July 1, 2008, by a second addendum entered into in
late May 2008. The description of the property in the second addendum, including the
prefatory language, "[a]pproximately 30.12 acres of vacant land," remained unchanged.
By a date at least several months earlier, in late January 2008, Mr. Nicholson's
communications with Mr. Kofmehl reveal that they foresaw the possibility of a legal
dispute over sewer accessibility and the northwest 3.93 acres. One of Mr. Nicholson's
communications stated:
If we are going to get Warren [Morgan, an owner and the managing
member of Baseline] and the City of Quincy to pay for [delivery of water
and sewer to the site] then we should have some idea of [its] cost because
they believe that they never promised the sewer and water would be
available to the property line just that the negotiations were subject to the
city sewer being accessable [sic]. I know that you anticipate that issue
possibly having to be clarified in court together with the 3.93 acres held out
for Warren's school.
CP at 374.1
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In the week before the final closing date, Mr. Kofmehl e-mailed Mr. Nicholson to
confirm that he was ready, willing, and able to close on the Quincy residential property
"based upon the terms and conditions of our agreement, dated April 13, 2007." CP at
614. The closing documents described the real property being purchased as "Lot 1,
Baseline Short Plat, according to the Short Plat thereof recorded in Volume 21 of Short
Plats, pages 55 and 56, records of Grant County, WA" based on a short plat for the
property that Baseline had recorded on the day before the closing. CP at 637 (statutory
warranty deed). The final short plat depicted the 30.12 acres as Lot 1 and the 3.93 acres
as Lot 2, as had the preliminary plat over a year earlier.
On July 1, 2008, Mr. Kofmehl traveled to the title company with the stated
purpose of closing. Once there, and having reviewed the closing documents, he refused
to close. Instead, his lawyer telephoned Baseline's broker to report a dispute over what
had been agreed. Mr. Kofmehl's lawyer followed up with a letter a few days later in
which he summarized Mr. Kofmehl's position as follows:
1 The record also includes an unsigned September 5, 2007 letter from Mr. Kofmehl
to Mr. Morris stating that Mr. Kofmehl had been surprised to learn from Mr. Nicholson
that Mr. Morgan did not consider the northwest 3.93 acres of FU 182 to be a part of the
property being purchased and sold. The letter also alluded to a misunderstanding over
water and concluded that "I have no more means in which to reconcile this purchase
agreement other then [sic] to return the land back to Mr. Morgan and to recover my
costs." CP at 349. The record indicates that the unsigned copy was obtained by Baseline
in discovery from Mr. Nicholson. There is no indication in the record, nor does Mr.
Kofmehl argue, that the letter was ever signed and sent.
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Pat has specifically directed me to advise that as was the case o[n] July 1,
2008, he remains ready, willing and able to proceed with the closing of the
property provided that the land conveyed includes the "excluded" 3.93
acres listed on the map which is attached to the initial offer, and which is
now referred to as Lot 2 on the short plat which was recorded on June 30,
2008. Further, until such time as the issue of the "accessibility of city
sewer" has been definitively resolved, the Seller has not met his
responsibility of satisfaction of that precondition. Absent the Seller[']s
ability to do so, the Seller has not met the pre-requirement and Pat is not
compelled to go forward with the closing.
CP at 1308.
Both parties thereafter brought suit, ultimately consolidated into the action below.
Mr. Kofmehl asserted claims for breach of contract, misrepresentation, and promissory
estoppel, and "alternate" claims of unilateral mistake, mutual mistake, rescission, and
quantum meruit (restitution). Baseline sought specific performance of the Agreement.
Mr. Kofmehl asserted the statute of frauds as an affirmative defense to what became
Baseline's counterclaim.
In response to a first set of cross motions for summary judgment, the trial court
determined that the Agreement and its addenda did not satisfy the statute of frauds and
dismissed Baseline's counterclaim for specific performance or damages.
Mr. Kofmehl had also moved for summary judgment granting rescission, arguing
that there was no meeting of the minds as to what property was subject to the Agreement,
but he withdrew that argument before the hearing. In granting Mr. Kofmehl's first
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motion for summary judgment, the court noted that its decision on the statute of frauds
did not mean that Baseline was not entitled to keep the $50,000 earnest money.
The parties had conducted discovery by this time and had arrived at clear and
conflicting positions as to the meaning of the Agreement. Baseline's position was that
they had agreed to the purchase and sale of only the 30.12 acres platted as Lot 1. It
contended that Mr. Kofmehl's present interpretation is revisionist history, adopted by Mr.
Kofmehl to avoid having to pay the agreed price in light of a sharp deterioration in the
market for residential property in Quincy after the Agreement was signed. In support of
its position it relied, among other evidence, on deposition testimony from Mr. Nicholson.
Deposition exhibit 23, to which Mr. Nicholson refers in the following testimony, was the
survey map (the depiction of the property set forth above):
Q. Who drafted the agreement?
A. I did anything that was typed.
Q. The legal description, you typed that?
A. Yes.
Q. Did you copy that from prior offers that had been exchanged
between the parties?
A. No.
Q. Where did you get the legal description?
A. I remember having to create this legal description from the Listing
Agreement. There was no exact legal description other than the
parcel number that you'll see on here. I was trying to define what it
was that -- to coordinate with these two pieces on the Listing
Agreement. I added the two separate parcels, 1 and 2, price up -- to
come up with the price -- and I added the -- well, this proves that I
had this somewhere along the line. I added [the] 17.4 and 12.72
descriptions on this map to come up with the 30.12 acres.
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Q. And so you were looking at the map that we've marked as Exhibit
Number?
A. 23.
Q. 23?
A. 23.
Q. Okay. And you intended by this legal description to include all of
the property that was outlined on this map?
A. That's why I outlined it, yes.
Q. And you intended the legal description to exclude the 3.93 acres in
the corner of this property?
A. Yes.
Q. And you intended the legal description to exclude the -- well, it's the
south portion of the property that's covered with irrigation -- or,
canal easements?
A. Yes.
. . . .
Q. Did you tell Pat Kofmehl what property he was offering to buy?
A. Yes. Yes.
CP at 464-65. Baseline maintained that it had satisfied the condition of access to sewer
through annexation and confirmation by the city of easements by which Mr. Kofmehl
could connect. It also relied on a letter obtained by Mr. Morgan from the Quincy city
administrator after the dispute became clear; that letter provided information on the
preexisting easement by which the property could be connected to existing sewer lines
and referred the parties to the easement document.
Mr. Kofmehl's position was that the change in the property's description and the
increase in the purchase price between the March 9 proposed purchase and sale
agreement and the Agreement were for the purpose, and had the effect, of including the
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northwest 3.93 acres in the purchase; he alleged that Baseline improperly exclude Lot 2 at
closing. He also contended that Baseline failed to satisfy the sewer accessibility
condition which, according to him, required Baseline to cause sewer and water lines to be
constructed to the property line. He addressed the testimony of Mr. Nicholson relied
upon by Baseline with a clarifying declaration from Mr. Nicholson, who testified that
Baseline misconstrued the deposition testimony and that he was referring to Mr.
Kofmehl's March 9 proposed purchase and sale agreement in testifying that Lot 2 was
excluded.
The parties again filed cross motions for summary judgment, this time on Mr.
Kofmehl's claims for rescission and restitution. At the time of hearing, the trial court
stated:
It seems to me that both parties share responsibility for attempting to
enter a contract and doing it in a way that rendered their attempt void. And
that no matter how I turn from side to side or top to bottom the defendant's
present argument, Baseline's present argument [that it was ready, willing,
and able to perform as agreed], it always seems to me to return to an issue
of asking the court to decide which of them was right and which of them
was wrong. And I believe the court has already made it clear that under this
factual scenario, the court cannot determine who was right and who was
wrong in regard to the contract that they attempted to form.
Report of Proceedings (Oct. 12, 2010) at 26. The court accepted Mr. Kofmehl's
argument that Baseline bore the burden of proving the parties' agreement and, if the
parties disagreed, then Mr. Kofmehl was entitled to judgment in his favor on the basis of
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the burden of proof alone. The court granted Mr. Kofmehl's motion, denied Baseline's
cross motion, and ordered restitution in the amount of $87,842.78, attorney fees, and
costs in favor of Mr. Kofmehl.
Baseline appeals the trial court's grant of summary judgment awarding rescission
and restitution to Mr. Kofmehl and denying its cross motion. It asks that we reverse the
trial court's orders and direct it to enter summary judgment in its favor.
ANALYSIS
The assignments of error and issues identified by the parties require that we first
address the following issues: (1) Who bears the burden of demonstrating whether the
vendor was ready, willing, and able to perform as agreed and (2) did the court err in
granting summary judgment to Mr. Kofmehl We address the issues in turn.
I
"Every conveyance of real estate, or any interest therein, and every contract
creating or evidencing any encumbrance upon real estate, shall be by deed." RCW
64.04.010. Every deed "shall be in writing, signed by the party bound thereby, and
acknowledged." RCW 64.04.020. It is the unusually strict but well-settled rule in
Washington that to comply with these statutes, real estate subject to a conveyance must
be described in sufficient detail that the court is not compelled to resort to extrinsic
evidence in order to find out what was in the minds of the contracting parties. Martin v.
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Seigel, 35 Wn.2d 223, 228, 212 P.2d 107 (1949); Key Design, Inc. v. Moser, 138 Wn.2d
875, 883-84, 983 P.2d 653, 993 P.2d 900 (1999). A purchase and sale agreement that
fails to comply with the statute's requirements is unenforceable. Home Realty, 146 Wn.
App. at 241. Both parties acknowledge that the Agreement insufficiently described the
subject property and thereby failed to comply with the statute of frauds. The trial court
properly determined in response to the first round of cross motions for summary
judgment that Mr. Kofmehl asserted a valid affirmative defense to Baseline's claim for
specific performance.
Nonetheless, Washington law is well settled that "'a vendee under an agreement
for the sale and purchase of property which does not satisfy the statute of frauds, cannot
recover payments made upon the purchase price if the vendor has not repudiated the
contract but is ready, willing, and able to perform in accordance therewith, even though
the contract is not enforceable against the vendee either at law or in equity.'" Schweiter
v. Halsey, 57 Wn.2d 707, 711, 359 P.2d 821 (1961) (quoting Dubke v. Kassa, 29 Wn.2d
486, 487, 187 P.2d 611 (1947)). Washington courts have "consistently denied" recovery
of earnest money paid under such circumstances, "in accord with the great weight of
authority." Id. at 712; Home Realty, 146 Wn. App. 231.
The issue of the vendor's willingness to perform arises when the vendee seeks
rescission and restitution, which were Mr. Kofmehl's claims at issue in the second round
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of summary judgment motions. While Mr. Kofmehl suggests on appeal that the claims
are distinct, Washington decisions generally treat rescission and restitution as operating in
tandem to produce the remedy that Mr. Kofmehl seeks: an unwinding of the contract
together with an award of whatever damages are required to restore the parties to their
prior positions. E.g., Home Realty, 146 Wn. App. at 235, 239-40; Watson v. Yasunaga,
73 Wn.2d 325, 327, 438 P.2d 607 (1968); Gillmore v. Green, 39 Wn.2d 431, 438, 235
P.2d 998 (1951). "A rescission is an avoidance of a transaction [and] will normally be
accompanied by restitution on both sides. Rescission is thus less a remedy and more a
matter of conceptual apparatus that leads to the remedy." 1 Dan B. Dobbs, Law of
Remedies: Damages-Equity-Restitution § 4.3(6), at 614 (2d ed. 1993).
While historically understood as an equity action, restitution has its roots in both
equity and the law. Nelson v. Appleway Chevrolet, Inc., 160 Wn.2d 173, 187, 157 P.3d
847 (2007) (citing Restatement (Third) of Restitution and Unjust Enrichment § 1 cmt. b
(Discussion Draft 2000)2). The justification for restitution is no longer based on a moral
judgment as to what is required by "'natural justice and equity,'" but instead on a
contention that the defendant has no adequate legal basis for retaining the benefit. Id. at
187 n.13 (quoting Moses v. Macferlan, (1760) 97 Eng. Rep. 676, 681 (K.B.). As
2 The third Restatement, while in draft form when Nelson was decided, was
adopted in 2011. Its § 1 and cmt. b continue to support the position adopted by the court
in Nelson.
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explained in the comments to the Restatement:
The concern of restitution is not, in fact, with unjust enrichment in
any such broad sense, but with a narrower set of circumstances giving rise
to what might more appropriately be called unjustified enrichment.
Compared to the open-ended implications of the term "unjust enrichment,"
instances of unjustified enrichment are both predictable and objectively
determined, because the justification in question is not moral but legal.
Unjustified enrichment is enrichment that lacks an adequate legal basis; it
results from a transaction that the law treats as ineffective to work a
conclusive alteration in ownership rights.
Restatement § 1 cmt. b. In Davenport v. Washington Education Ass'n, the court observed
that "[o]ne person 'enriches' another merely by transferring money or other benefit to the
other. But a transferee who receives money or other benefit is not liable for restitution
unless 'the circumstances of its receipt or retention are such that, as between the two
persons, it is unjust for him [or her] to retain it.'" 147 Wn. App. 704, 727-28, 197 P.3d
686 (2008) (second alteration in original) (footnote omitted) (quoting Chandler v. Wash.
Toll Bridge Auth., 17 Wn.2d 591, 601, 137 P.2d 97 (1943)), review granted, 166 Wn.2d
1005 (2009), appeal dismissed, No. 82615-3 (Wash. May 4, 2010).
In assessing whether it is unjust for Baseline to retain the earnest money deposited
by Mr. Kofmehl and disbursed to it according to the Agreement's terms, the "predictable
and objectively determined" legal justification that would support Baseline retaining the
earnest money is necessarily the rule recognized in the 106-year-old line of Washington
cases beginning with Johnson v. Puget Mill Co., 28 Wash. 515, 68 P. 867 (1902) and
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most recently expressed in Home Realty: that a vendor is entitled to retain the deposit if it
is ready, willing, and able to perform as agreed and it is the purchaser who refuses to
perform by setting up the statute against the vendor. Home Realty, 146 Wn. App. at 240.
Without establishing the vendor's repudiation or failure to perform, the vendee has not
shown that the vendor was "unjustifiably" enriched. See accord Gillmore, 39 Wn.2d at
437 (allocating burden of proof to vendee where a real estate contract was at issue).
Mr. Kofmehl nonetheless argues that Hornback v. Wentworth, 132 Wn. App. 504,
513, 132 P.3d 778 (2006), review granted, 158 Wn.2d 1025 (2007), appeal dismissed,
No. 78707-7 (Wash. May 17, 2007) states the general rule that "[v]oid or illegal real
estate contracts create a common law right of rescission" and that the limitation on
rescission and restitution provided by cases such as Home Realty is a narrow exception.
But neither Hornback nor Gilmore v. Hershaw, 83 Wn.2d 701, 521 P.2d 934 (1974), on
which Hornback relies for the stated proposition, involved a void or illegal real estate
contract. See Hornback, 132 Wn. App. at 509 ("the parties' contract was not in violation
. . . at the time it was entered"); Gilmore, 83 Wn.2d at 704 (statute cited by vendee did
not make the sale of land "void or illegal"). Hornback involved a contract legal at its
inception that was frustrated by supervening illegality; accordingly, as a matter of
contract law, not common law, restitution was available. 132 Wn. App. at 513; see
Chem. Bank v. Wash. Pub. Power Supply Sys., 102 Wn.2d 874, 934, 691 P.2d 524 (1984)
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(quoting Restatement (Second) of Contracts § 272 (1981) for the availability of
restitution), cert. denied, 471 U.S. 1065, 1075 (1985). The Gilmore court was never
required to reach the remedy for a void or illegal contract; it accepted the appellants'
position that common law rescission would be available in that event, but without
analysis. 83 Wn.2d at 703. Hornback appears to have discussed void and illegal
contracts as an analogous aside. 132 Wn. App. at 513. The proposition for which Mr.
Kofmehl cites Hornback is dicta in both cases and need not be examined further.
Mr. Kofmehl also points to Home Realty as implying that the vendor bears the
burden of proof, pointing to the court's statements that the "[vendors] are unable to point
to anything in the record demonstrating that they met this standard" and "[t]he record
before us is devoid of conclusive evidence that the [vendors] remained ready, willing, and
able to perform." 146 Wn. App. at 241. Baseline responds with the countervailing
implication of the statement in Johnson that "[t]here is no proof whatever that the
[vendor] was not at all times . . . able, ready, and willing to fully perform . . . and there is
no proof that the [vendee] ever offered to make further payments as required by the
contract." 28 Wash. at 521. It also cites Browne v. Anderson, 36 Wn.2d 321, 217 P.2d
787 (1950), which denied a vendee's recovery without any express finding on the
vendor's willingness and ability to perform; from that, Baseline argues that the court's
silence is best explained by the rule that the absence of a finding is deemed a negative
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finding against the party having the burden of proof. Br. of Appellant at 21. None of
these decisions directly address the burden of proof. Given the distinct possibility that
the court uncritically accepted a shared position of the parties or made the statements on
which Mr. Kofmehl and Baseline rely without considering the ramifications for the issue
raised here, we find none of the language cited from these cases to be persuasive.
The allocation of the burden of proof follows naturally from the fact that Mr.
Kofmehl is the party seeking restitution and must therefore prove that Baseline is unjustly
enriched by retaining the earnest money. Establishing that Baseline was not ready,
willing, and able to perform as agreed is a necessary element of Mr. Kofmehl's claim.
II
Having determined that Mr. Kofmehl bears the burden of proving that Baseline
was not willing to perform as agreed, we address whether summary judgment was
appropriately granted in his favor. We review an order granting summary judgment de
novo. Lybbert v. Grant County, 141 Wn.2d 29, 34, 1 P.3d 1124 (2000). Summary
judgment is proper if no genuine issue of material fact remains and the moving party is
entitled to a judgment as a matter of law. CR 56(c).
When reviewing a summary judgment order involving a heightened burden of
proof, as is the case here,3 this court "must view the evidence presented through the prism
3 The parties agreed that a heightened standard of clear and convincing evidence
applies. Br. of Appellant at 23-24; Br. of Resp't at 16, 24. We assume, without deciding,
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No. 29683-1-III
Kofmehl v. Baseline Lake, LLC
of the substantive evidentiary burden." Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
254, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986); Burton v. Twin Commander Aircraft,
LLC, 171 Wn.2d 204, 223 n.8, 254 P.3d 778 (2011). Thus, we must determine whether,
viewing the evidence in the light most favorable to Baseline, a rational trier of fact could
find that Mr. Kofmehl supported his claim for restitution with clear, cogent, and
convincing evidence. Woody v. Stapp, 146 Wn. App. 16, 22, 189 P.3d 807 (2008).
Mr. Kofmehl argues that he established a right to restitution by demonstrating that
the parties claim different understandings of the Agreement -- that alone demonstrates that
Baseline was unwilling to perform as agreed, or at least as agreed by Mr. Kofmehl. He
persuaded the trial court that the parties' disagreement and Baseline's asserted burden of
proof, without more, entitled him to summary judgment. Mr. Kofmehl's argument to this
end sometimes resembles the alternative theory he argued in support of summary
judgment but then withdrew: that no contract was formed because there was no meeting
of the minds. But we can see from the record on appeal that lack of mutual assent is itself
disputed. To rely on a lack of mutual assent for a restitutionary remedy, Mr. Kofmehl
would have to prove there was no meeting of the minds.4 If shown, it would be a basis
for a different restitution claim.5 Whether there is a meeting of the minds is determined
that it applies.
4 While the issue ordinarily arises as a defense to enforcement, Mr. Kofmehl
prevented enforcement by raising the statute of frauds.
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No. 29683-1-III
Kofmehl v. Baseline Lake, LLC
by the objective manifestations of the parties. Hearst Commc'ns, Inc. v. Seattle Times
Co., 154 Wn.2d 493, 503, 115 P.3d 262 (2005).
But no motion for summary judgment on mutual assent was submitted for decision
below, so no issue of mutual assent is before us on appeal. We are presented instead with
restitution predicated on the Agreement's violation of the statute of frauds, something that
Mr. Kofmehl has established. To demonstrate that Baseline's retention of the earnest
money was unjust, he must prove that Baseline was unwilling to perform its obligations
under the Agreement. Establishing the meaning of the Agreement is an essential part of
his proof.
Given the meaning of the Agreement advanced by Mr. Kofmehl, he
understandably supported his motion for summary judgment for restitution with
declarations seeking to establish that the Agreement includes the 34.05 acres later
identified in the short plat application as Lots 1 and 2, and that the condition of the
Agreement providing for "accessibility of sewer" meant that Baseline would cause water
and sewer lines to be extended to the property. With the Agreement thus understood, Mr.
5 The Restatement suggests that "[i]f a purported agreement proves after
performance to be unenforceable because of a defect in contract formation -- with the
result that the claimant has performed in the mistaken belief that a contract exists when in
fact it does not -- the resulting restitution claim is generally regarded as one for benefits
conferred by mistake. See § 9, Comment f." Restatement (Third) of Restitution § 31
cmt. a.
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No. 29683-1-III
Kofmehl v. Baseline Lake, LLC
Kofmehl argues that Baseline failed and refused to perform.
Baseline responded with evidence that the parties instead agreed to the purchase
and sale of only the 30.12 acres ultimately platted as Lot 1. Its evidence included its
broker's and principal's testimony that the property offered was limited to that platted as
Lot 1; the listing agreement excluding the 3.93 acres in the northwest corner; the survey
map excluding the 3.93 acres in the northwest corner; Mr. Kofmehl's proposed purchase
and sale agreements and the Agreement, all describing the property as consisting of 30.12
acres; contemporaneous profit projections by Mr. Kofmehl premised on development of
only 30.12 acres; and the deposition testimony of Mr. Nicholson that he prepared the
description of the property with the intention of excluding the northwest 3.93 acres, an
offer he explained to Mr. Kofmehl. We need not consider Mr. Nicholson's clarifying
affidavit asserting that his deposition testimony has been misunderstood. His explanation
that he was only describing Mr. Kofmehl's first offer contradicts questions and answers
that Baseline has demonstrated repeatedly and clearly tied his testimony to the
Agreement. See Jones v. State, 170 Wn.2d 338, 370, 242 P.3d 825 (2010) ("'When a
party has given clear answers to unambiguous . . . questions [in a deposition] which
negate the existence of any genuine issue of material fact, that party cannot thereafter
create such an issue with an affidavit that merely contradicts, without explanation,
previously given clear testimony.'" (alterations in original) (internal quotation marks
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No. 29683-1-III
Kofmehl v. Baseline Lake, LLC
omitted) (quoting Marshall v. AC&S, Inc., 56 Wn. App. 181, 185, 782 P.2d 1107
(1989))).
With respect to the condition "accessibility of sewer," Baseline presented
declarations showing that the subject property was annexed by the city of Quincy and
confirmation by city officials that there are easements in place to provide for sewer to the
property. The city administrator identified the course of the easement. Baseline procured
and provided a copy of the underlying easement document.
Viewing the summary judgment record in the light most favorable to Baseline, Mr.
Kofmehl demonstrated that Baseline refused to perform the terms of the Agreement as he
interprets those terms, but he did not demonstrate that the Agreement should be
interpreted, as a matter of law, to have the meaning he advances. Summary judgment in
Mr. Kofmehl's favor was improper.
We reverse the trial court's order granting summary judgment in favor of Mr.
Kofmehl, reverse the trial court's orders of restitution and attorney fees, and remand for
further proceedings consistent with this opinion.
The remainder of this opinion has no precedential value. Therefore, it will be filed
for public record in accordance with the rules governing unpublished opinions. RCW
2.06.040.
Two issues remain: (3) If the court did err, is Baseline entitled to summary
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No. 29683-1-III
Kofmehl v. Baseline Lake, LLC
judgment in its favor and (4) is Mr. Kofmehl entitled to contractual attorney fees on
appeal?
III
Baseline appeals the trial court's denial of its cross motion for summary judgment.
"Although there is no appeal as of right from the denial of a motion for summary
judgment, we may exercise our discretion and rule on a denied motion for summary
judgment to serve the interest of judicial economy where there are no genuine issues of
material fact." Anderson v. State Farm Mut. Ins. Co., 101 Wn. App. 323, 329, 2 P.3d
1029 (2000), review denied, 142 Wn.2d 1017 (2001). In ruling on the trial court's denial,
we review the evidence in the light most favorable to Mr. Kofmehl. Because Mr.
Kofmehl bears the burden of proof, Baseline may submit adequate affidavits after which,
if Mr. Kofmehl "'fails to make a showing sufficient to establish the existence of an
element essential to that party's case, and on which that party will bear the burden of
proof at trial,'" then summary judgment is properly granted in favor of the moving party.
Young v. Key Pharm., Inc., 112 Wn.2d 216, 225, 770 P.2d 182 (1989) (quoting Celotex
Corp. v. Catrett, 477 U.S. 317, 322, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986)).
Baseline has presented undisputed evidence that it was ready, willing, and able to
perform the terms of the Agreement as it interprets those terms. Its entitlement to
summary judgment turns on whether it has presented undisputed evidence that it was
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No. 29683-1-III
Kofmehl v. Baseline Lake, LLC
ready, willing, and able to perform terms that should be interpreted, as a matter of law, to
have the meaning it advances.
We have already summarized the evidence presented by Baseline in support of its
position as to the Agreement's meaning. Mr. Kofmehl responds with the following
evidence in support of his construction of the Agreement: descriptions of the property
covered by his offers that changed as he increased his offering price, the fact that his
originally-proposed conditions addressing Baseline's continued ownership of the 3.93
acres were correspondingly dropped from his proposals, contemporaneous profit
projections he prepared that were predicated on the full 34.05 acres, and his expenditures
toward platting the northwest 3.93 acres after the Agreement was executed.
In response to Baseline's evidence as to the meaning of the "accessibility of
sewer" provision, Mr. Kofmehl presented the testimony of his project manager, Robert
West, who testified to Mr. Kofmehl's contemporaneous statements in April 2007 that the
Agreement required Baseline to construct a sewer connection to the property line.
Baseline contends that we need not consider evidence bearing on the sewer
accessibility issue, because the condition has an ordinary and plain meaning and can be
construed as a matter of law. It directs us to Goedecke v. Viking Invest. Corp., 70 Wn.2d
504, 424 P.2d 307 (1967), for the proposition that such a condition is satisfied if adjacent
sewer easements enable the vendee to construct its own connection. But while Goedecke
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No. 29683-1-III
Kofmehl v. Baseline Lake, LLC
involved a similar provision -- "'that public sewers are available to property'" -- the
parties' dispute in that case was not over the meaning of the provision, but instead over
whether a county road (the right-of-way through which a sanitary sewer line would be
constructed) was indeed available to the purchasers for that use. 70 Wn.2d at 505, 507
("Whether public sewers were available to the property . . . stands or falls on whether
McCallister Road was available to respondents as a public access."). The court had no
occasion to construe the condition and the decision is not authority for its meaning.
Considering all, Baseline's evidence, while substantial, does not clearly establish
the absence of any genuine issue of material fact.
IV
Baseline disputes the award of attorney fees below and both parties request
attorney fees on appeal. The awarding of attorney fees is premature. Neither party has
yet prevailed on the merits at issue in this appeal.
We reverse the trial court's order granting summary judgment in favor of Mr.
Kofmehl, reverse the trial court's orders of restitution and attorney fees, and remand for
further proceedings consistent with this opinion.
___________________________________
Siddoway, A.C.J.
WE CONCUR:
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No. 29683-1-III
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__________________________________ ___________________________________
Brown, J. Kulik, J.
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