Opinion ID: 2562740
Heading Depth: 2
Heading Rank: 2

Heading: The Church's Breach of the Property Use Agreement and the City's Duty to Process Permit Application

Text: ¶ 28 The Church signed a contract with the City in 2004 promising to obtain a valid permit before hosting Tent City at the Church in the future. The Church argues that the contract was only valid for 2004, and even if it breached, it was justified by the City's breach. The relevant contract language, found at section 2.B. in the contract, reads: [Tent City] and one or more Woodinville-based church sponsor(s) may jointly submit an application to locate a future Tent City at some other church-owned location, but (1) must allow sufficient time in the application process for public notice, public comment and due process of the permit application; and (2) must agree not to establish, sponsor or support any homeless encampment within the City of Woodinville without a valid temporary use permit issued by the city. CP at 160. The Church did not obtain a valid permit before hosting Tent City 4. Under the contract's clear language, the Church breached this contract. ¶ 29 The Church argues to limit the contract effect to 2004. It points to section 3 of the contract, which reads, [Tent City] shall promptly vacate the Property no later than 40 days after August 14, 2004 and which allows the Church to submit an application to maintain Tent City 4 at the Property for an additional 60 days, provided that a valid city permit is issued.... Id. It also cites the first sentence of the contract: THIS AGREEMENT FOR TEMPORARY USE OF CITY PROPERTY ('the Agreement') is hereby executed.... Id. at 159. It also argues that section 2 is time-limited because it begins with: [Tent City's] use of the Property pursuant to this Agreement is expressly subject to the following conditions.... Id. at 160 (emphasis added). The Property means the park, id. at 159, so section 2 must apply only to the park. ¶ 30 These arguments fail because they require the court to entirely disregard section 2 of the contract and courts avoid such rewriting of contracts. Colo. Structures, Inc. v. Ins. Co. of the W., 161 Wash.2d 577, 588, 167 P.3d 1125 (2007). ¶ 31 The Church also argues we find the contract ambiguous and construe the contract against the City, as drafter. However, the contract expressly provides otherwise: No ambiguity shall be construed against any party based upon a claim that the party drafted the ambiguous language. CP at 167. The contract is not ambiguous and the promise at issue is section 2: church sponsor(s) may jointly submit an application to locate a future Tent City at some other church-owned location, but ... must agree not to establish, sponsor or support any homeless encampment within the City of Woodinville without a valid temporary use permit issued by the city. CP at 160. This is simple and clear; it is not ambiguous. The parties obviously considered a future Tent City stay, and the Church breached by not obtaining a valid temporary use permit. ¶ 32 Though the Church breached, it alternatively argues that such breach was justified. On this theory, the City had a duty to accept and process the Church's permit application. When the City refused the permit application, citing the moratorium, the City breached that duty. ¶ 33 If a party materially breaches a contract, the other party may treat the breach as a condition excusing further performance. Colo. Structures, 161 Wash.2d at 588, 167 P.3d 1125. Under the agreement, the Church had the duty to apply for a permit and the City had a corresponding duty to accept and process. All parties to a contract have duties of good faith and fair dealing. Metro. Park Dist. v. Griffith, 106 Wash.2d 425, 437, 723 P.2d 1093 (1986). When the City rejected the Church's application without even considering it, the Church was excused from full compliance. Though the Church did not provide sufficient processing time, as also required by the 2004 contract, this does not excuse the City's refusal to process the permit application, especially since the City actually had time to hold a public hearing. ¶ 34 Under the contract's clear terms, the Church promised not to host Tent City 4 until it obtained a permit, a promise it broke. Since the City would not process the Church's permit application, the Church was excused from its performance under these unique circumstances.