Court Opinion

ID: 9536196
Source: CourtListenerOpinion
Date Created: 2023-08-07 06:56:09.889964+00
Date Added: 2024-06-11T13:33:28.921127
License: Public Domain

Dore, J.
(dissenting)—The majority correctly sets forth the law in Washington on the doctrine of commercial frustration. At its heart is the question of foreseeability. If the supervening event which made performance impossible was not foreseen by the parties, then the doctrine of commercial frustration may be used as a defense to the charge of nonperformance. I dissent from the majority's application of the law to the facts of this case.
The trial judge found that the public outcry, and concomitant failure of the parties to secure the proper permits, was not foreseen by the parties.
Finding of fact No. 24:
The Court finds that, although the parties contemplated and were fully aware of the necessity of obtaining permits from the regulatory agencies involved and that this process might require as much as two years, the parties were not aware of and did not contemplate the public outcry that was heard when news of the project reached the public in the summer of 1970. Weyerhaeuser particularly had prepared itself and had attempted to prepare the public in every way that it could for what can be described as a showcase of industrial development with proper environmental concern. The parties did not anticipate and were not prepared for the objection and the extensive litigation which followed the initial granting of the unclassified use permit. This unanticipated *890circumstance made performance of the contract vitally different from what was reasonably to be expected by the parties when the lease was entered into.
(Italics ours.) This finding is supported by substantial evidence and therefore stands as a verity on appeal. Because this event was not foreseen, the doctrine of commercial frustration was available to Stoneway as a defense.
Almost from the start, Stoneway encountered serious, unexpected problems in its efforts to commence mining operations under the terms of the lease. The public had recently become conscious of the conflict between preserving the natural environment and encouraging industrial development. Unfortunately for Stoneway, the environmentalists prevailed even though Weyerhaeuser tried to allay the public's fears. Finding of fact No. 11.
By the summer of 1970, the opposition to the proposed project "was loud and vociferous." Finding of fact No. 12. It continued to grow after the King County Council granted the necessary unclassified use permit. By September 1970, Stoneway's opponents had retained approximately 22,000 signatures on a referendum petition which would nullify the Council's action. Finding of fact No. 14.
To make matters worse, there were problems surfacing between Stoneway and Weyerhaeuser. In April of 1971, counsel for Stoneway declared that Weyerhaeuser had reneged on its agreement, which had been made a part of the lease to render assistance to Stoneway in obtaining permits. Stoneway refused, after that time, to pay any additional rent under the lease. Finding of fact No. 17.
Inasmuch as there was no anticipation by the parties of the public's determination to block the permits, I cannot agree with the majority that the parties allocated the risk of the occurrence of these difficulties by way of the clause in the contract which provided for a minimum annual rental "irrespective of whether Lessee produces any minerals from the leasehold." That language is not uncommon in mining leases. Its purpose is often "to insure a steady income to the lessor and to spur the lessee into a prompt and diligent *891development and operation of the property." 28 A.L.R.2d at 1015-16. In light of the trial court's finding (finding of fact No. 24), there is no reason to seek an alternative, and to my mind strained, construction of this provision of the lease.
The trial court ruled that the lessee should be relieved of its obligations under the lease as of the time when the parties anticipated the permits would be granted (January 1, 1972). I agree.
I would affirm.
Reconsideration denied October 21, 1980.
Review granted by Supreme Court January 19, 1981.