Court Opinion

ID: 3132898
Source: CourtListenerOpinion
Date Created: 2015-10-20 16:35:02.985346+00
Date Added: 2024-06-11T07:38:27.903313
License: Public Domain

FILED 

                                                             OCTOBER 20, 2015 

                                                          In the Office of the Clerk of Court 

                                                        W A State Court of Appeals, Division III 

         IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON 

                            DMSION THREE 

FPA CRESCENT ASSOCIATES, LLC,                 )
a Delaware limited liability company,         )        No. 32705·1·111
                                              )
                     Respondent,              )
                                              )
              v.                              )
                                              )        PUBLISHED OPINION
JAMIE'S LLC; PENDLETON                        )
ENTERPRISES, LLC, a Washington                )
limited liability company, d/b/a The          )
Daiquiri Factory Spokane; and JAMIE           )
PENDLETON, an individual,                     )
                                              )
                     Appellants.              )

      LAWRENCE·BERREY, J. -        This case presents the issue of whether a landlord may

bypass the notice and right to cure provision ofRCW 59.12.030(3) by declaring a tenant

in default for nonpayment of rent, then terminating the tenancy, and then arguing that the

tenant is a holdover tenant unlawfully detaining under RCW 59.12.030(1). We answer

"no" to the issue presented. We reverse and remand to the trial court for it to consider the

tenant's proper remedy.
No. 32705-1-II1
FPA Crescent Assocs. v. Jamie's LLC

                                          FACTS

       Respondent FPA Crescent Associates LLC (FPA) owns the Crescent Building,

located in downtown Spokane. It leased a portion of the building to Jamie's, LLC. Jamie

Pendleton personally guaranteed the lease. The parties added Pendleton Enterprises LLC

to the lease shortly thereafter. We refer to the appellants collectively as "Pendleton."

       The lease commenced February 1,2014, and provided an expiration date of

midnight, July 31, 2021. The lease defined the "lease term" as beginning on the

commencement date and ending on the expiration date, unless terminated sooner pursuant

to the express terms and conditions of the lease. Clerk's Papers (CP) at 27 The lease

required payment of monthly "base rent" and "additional rent." CP at 24. Base rent of

$4,754.00 per month was abated for the first six months, unless Pendleton defaulted, in

which case abated rent was immediately due in full. Additional rent generally was

defined as Pendleton'S pro rata share of common maintenance charges, taxes, and

insurance, in relation to the total gross area of FPA's building. Additional rent was not

abated. The lease defined "default" as including any failure by Pendleton to pay any rent

when due. CP at 30. Paragraph 19.2 of the lease authorized FPA to terminate the lease

on any event of default:

       Upon the occurrence of any event of default by Tenant, Landlord shall
       have, in addition to any other remedies available to Landlord at law or in
       equity, the option to terminate this Lease, in which event Tenant shall
       immediately surrender the Premises to Landlord, and if Tenant fails to do
       so, Landlord may, without prejudice to any other remedy which it may have

                                             2

No. 32705-1-111
FPA Crescent Assocs. v. Jamie's LLC

       for possession or arrearages in rent, enter upon and take possession of the
       Premises and expel or remove Tenant.

CPat31.

      Pendleton failed to timely pay the additional rent charge for the month of

May 2014. On May 9, FPA served Pendleton with a "Notice of Termination of Lease"

for failure to pay rent. CP at 46. FPA informed Pendleton that as of May 7, $2,229.61 1

was due on its account. The termination notice demanded that Pendleton immediately

surrender the premises as of the date of the notice. The notice stated, "If the Tenant does

not voluntarily and immediately surrender the Premises, as required in Section 19.2 of the

Lease, the Landlord will take immediate legal action for possession or arrearage in Rent

and expel or remove the Tenant." CP at 46. On May 10, Pendleton sent payment to FPA

via certified mail. FPA received the funds on May 13. Again on May 16, Pendleton sent

payment to FPA. FPA returned the two checks to Pendleton.

      On May 28, FPA filed a summons for unlawful detainer against Pendleton. In its

verified complaint for unlawful detainer, FPA requested a writ of restitution claiming that

Pendleton failed to pay rent and other charges under the lease and failed to surrender

possession of the premises. FPA asked for immediate possession of the property. FPA

       1 The amount due included a holdover balance, which Pendleton disputed.
Pendleton took exception to FPA's claims that it did not pay rent. Both Pendleton and
FPA filed documents with the trial court recounting the billing issues and documenting
the disagreement.

                                             3

No. 32705-1-111
FPA Crescent Assocs. v. Jamie's LLC

also claimed (1) breach of the lease by failing to make rent payments, (2) breach of the

lease by illegal actions due to two trademark infringement cases pending against

Pendleton and due to Pendleton's failure to prohibit patrons from taking alcohol outside

the bar, and (3) breach of guaranty and contract for Pendleton's failure to make all

payments due under the lease. FPA asked for monetary damages in the amount of unpaid

rent and damages under the lease at the time ofjudgment.

       On June 11, the trial court held a show cause hearing. FPA's argument centered

on Pendleton's failure to pay rent and FPA's subsequent termination of the lease.

FPA said it notified Pendleton of the hearing and served a notice of termination, which is

all that was required under the statute. FPA argued that it was not required to give notice

of charges that were due or an attempt to cure. In reply briefmg, FPA noted that

a tenant is guilty of unlawful detainer when he or she holds or continues in possession

after expiration of the term for which it is let to him or her, with a general cite to

RCW 59.12.030. In response, Pendleton challenged FPA's calculation of rent and billing

process. It did not argue that FPA failed to provide notice and a right to cure.

       The trial court granted FPA's request and issued an order for writ of restitution for

unlawful detainer. The court found no defect in the notice when considering the

requirements of the lease. The court also determined that the issue of damages needed to

be examined at another hearing.

                                               4

No. 32705-1-111
FPA Crescent Assocs. v. Jamie's LLC

       One week later, on June 18, Pendleton filed a motion to quash the writ of

restitution and to dismiss the unlawful detainer action with prejudice. Pendleton argued

that FPA failed to abide by the notice and right to cure provisions of the unlawful

detainer statute. Specifically, Pendleton maintained that pursuant to RCW 59.12.030(3)

for actions based on nonpayment of rent, FPA needed to give Pendleton notice that it

could either vacate the premises or cure the default within three days of service.

Pendleton argued that the action should be dismissed because Pendleton attempted to

cure, but FPA refused to accept the payment.

       A few days after the motion to quash was filed, the Spokane County Sheriffs

Department executed the writ of restitution authorized by the trial court. A locksmith

opened the doors and replaced the locks. FPA took possession of the premises.

       On June 26, FPA responded to the motion to quash. FPA contended that the terms

of the lease controlled, and that the lease terms did not provide for a notice and right to

cure. FPA maintained that RCW 59.12.030(1) applied, not RCW 59.12.030(3), because

Pendleton was a holdover tenant as a result ofFPA earlier terminating the lease due to

default. FPA further maintained that the amount tendered was insufficient because

Pendleton actually owed $19,016.00, which included abated rent.

       The trial court heard arguments on July 3. Following argument, the trial court

dismissed the motion to quash the writ of restitution. The trial court found that

Pendleton's motion was procedurally unsupported because Pendleton did not provide a

                                              5

No. 32705-1-III
FPA Crescent Assocs. v. Jamie's LLC

basis in the court rules or RCW 59.12.010 to grant the relief requested, or a basis to

support a change in the court's prior decision on the writ of restitution. The court also

found that the parties' lease did not require notice under RCW 59.12.030, nor did it

require FPA to accept post-tennination tender of rent to cure the amount owed.

       FPA filed a motion for summary judgment on its breach of lease claim and its

breach of guaranty and contract claim, both of which involved the nonpayment of rent

and the default provision of the lease. FPA requested partial summary judgment on

liability, $21,245.61 in damages occurring prior to tennination, and $33,324.20 in

attorney fees.

       Pendleton responded that summary judgment was not appropriate because FPA

was not entitled to relief under the unlawful detainer statute. Again, Pendleton claimed

that FPA did not provide notice and a right to cure under the statute and that FPA had not

presented any legal authority stating that a lease agreement can negate the notice

requirement of the unlawful detainer statute. In a new argument, Pendleton challenged

the subject matter jurisdiction of the trial court. Pendleton maintained that the court's

jurisdiction was conditional on FPA's compliance with the procedures of the special

unlawful detainer statute. Thus, any noncompliance with the statutory method of process

precluded the superior court from exercising subject matter jurisdiction over the unlawful

detainer proceeding. Last, Pendleton contended that FPA's action for unlawful detainer

confused the statutory proceeding with the common law action of ejectment. Pendleton

                                             6

No. 32705-1-III
FPA Crescent Assocs. v. Jamie's LLC

maintained that in order to take advantage of the benefits of a summary unlawful detainer

action for failure to pay rent, FPA needed to abide by the statutory requirements.

        After argument, the trial court took the matter under advisement. FPA filed a

supplemental brief in support of summary judgment. FPA clarified that its unlawful

detainer action was not premised on nonpayment of rent in RCW 59.12.030(3) but on

holdover tenants in RCW 59.12.030(1), which does not require notice or a right to cure.

FPA argued that it did not violate the statute and the trial court had jurisdiction to hear

the matter and order summary judgment in favor ofFPA.

        Pendleton opposed FPA's supplemental briefing. Pendleton maintained that

FPA's complaint for unlawful detainer was based on nonpayment of rent, not based on

RCW 59.12.030(1) for holdover tenants who remain in possession after expiration of the

term for which the property is let. Pendleton contended that holdover due to expiration of

a term does not apply in this situation because the 90-month term had not expired.

        The trial court eventually granted FPA's motion for summary judgment. The trial

court determined that Pendleton defaulted on the lease by failing to timely pay amounts

owing when due. The trial court also determined that FP A terminated the lease pursuant

to its own terms and obtained a writ of restitution pursuant to RCW 59.12.030(1).

Because FPA was the prevailing party, the trial court awarded FP A damages and attorney

fees.

                                              7

No. 32705-1-III
FPA Crescent Assocs. v. Jamie's LLC

       Pendleton filed a motion for reconsideration, expanding on the issues raised in its

opposition to supplemental briefing and prior arguments. In response, FPA contended

that RCW 59.12.030(1) applied because the term of Pendleton's lease expired once FPA

terminated the contract. Looking to the lease agreement, FPA argued that the lease term

was defmed as the term stated in the lease summary "unless this Lease is sooner

terminated pursuant to the express terms and conditions of this Lease." CP at 513.

       The trial court denied Pendleton's motion for reconsideration. Pendleton appeals.

It contends that the trial court erred when it granted summary judgment based on

RCW 59.12.030(1), because the statute does not apply when a landlord unilaterally

terminates a lease prior to the end of the specified term. Pendleton contends that

RCW 59.12.030(3) applies to unlawful detainer actions for nonpayment of rent, and that

the statute requires notice and a right to cure before the court has subject matter

jurisdiction.

                                        ANALYSIS

       This court reviews a summary judgment order de novo. Lunsford v. Saberhagen

Holdings, Inc., 166 Wn.2d 264,270,208 P.3d 1292 (2009) (quoting City ofSpokane v.

Spokane County, 158 Wn.2d 661, 671, 146 P.3d 893 (2006)). When reviewing a

summary judgment order, the appellate court engages in the same inquiry as the trial

court, viewing the facts and all reasonable inferences in the light most favorable to the

nonmoving party. Riojas v. Grant County Pub. Uti!. Dist., 117 Wn. App. 694,697, 72

                                              8

No. 32705-1-111
FPA Crescent Assocs. v. Jamie's LLC

P.3d 1093 (2003). Summary judgment is appropriate only if the moving party can show

that ''there is no genuine issue as to any material fact and that the moving party is entitled

to ajudgment as a matter of law." CR 56(c). "A material fact is one upon which the

outcome of the litigation depends on whole or in part." Atherton Condo. Apartment-

Owners Ass'n Bd. ofDirs. v. Blume Dev. Co., 115 Wn.2d 506,516,799 P.2d 250 (1990).

       The primary question here is the proper application ofRCW 59.12.030(1) and (3).

We review questions oflaw de novo. Indigo Real Estate Servs., Inc. v. Wadsworth, 169

Wn. App. 412, 417, 280 P.3d 506 (2012). The primary objective of statutory

interpretation is to discern and implement legislative intent. Dep 't ofEcology v.

Campbell & Gwinn, UC, 146 Wn.2d 1,9,43 P.3d 4 (2002). In determining legislative

intent, we first look to the language of the statute. Absent ambiguity, a statute's meaning

is derived from the language of the statute and we must give effect to that plain meaning

as the expression of legislative intent. Id. at 9-10.

       The unlawful detainer action in chapter 59.12 RCW provides an expedited method

for resolving the right to possession and hastening the recovery of real property. MacRae

v. Way, 64 Wn.2d 544,546,392 P.2d 827 (1964). "In such proceedings the superior

court sits as a special statutory tribunal, limited to deciding the primary issue of right to

possession together with the statutorily designated incidents thereto, i.e., restitution and

rent or damages." Id. (alteration in original). The primary issue to be resolved in an

unlawful detainer action is the right to possession. Port ofLongview v.Int'l Raw

                                               9

No. 32705-1-II1
FPA Crescent Assocs. v. Jamie's LLC

Materials, Ltd., 96 Wn. App. 431,436,979 P.2d 917 (1999). The burden is on the

landlord in an unlawful detainer action to prove his or her right to possession by a

preponderance of the evidence. Hous. Auth. ofCity ofPasco & Franklin County v.

Pleasant, 126 Wn. App. 382, 392, 109 P.3d 422 (2005). "The possession of a tenant is

originally lawful, and is so presumed until the contrary appears." Duprey v. Donahoe, 52

Wn.2d 129, 135,323 P.2d 903 (1958).

       "The unlawful detainer statute is in derogation of common law." Hous. Auth. of

City ofEverett v. Terry, 114 Wn.2d 558, 563, 789 P.2d 745 (1990). "The action of

unlawful detainer is the legal substitute for the common-law right of personal re-entry for

breach." Woodwardv. Blanchett, 36 Wn.2d 27,32,216 P.2d 228 (1950). The statutory

action relieves a landlord of having to file an expensive and lengthy common law action

of ejectment. Terry, 114 Wn.2d at 563 (quoting Wilson v. Daniels, 31 Wn.2d 633, 643­

44, 198 P.2d 496 (1948)). To take advantage of an unlawful detainer action and reap the

benefits of the summary proceeding, a landlord must comply with the requirements of the

statute. Id. at 563-64. Because the statute curtails the application of common law, any

ambiguities must be strictly construed in favor of the tenant. Id.

       There are seven situations where a tenant can be found in unlawful detainer of real

property. RCW 59.12.030. Each situation outlines the proscribed action by the tenant

and the requirements ofthe landlord to support a fmding of unlawful detainer. The first

subsection addresses a holdover tenant. That subsection provides that a tenant is guilty of

                                             10 

No. 32705-1-UI
FPA Crescent Assocs. v. Jamie's LLC

unlawful detainer "(1) [w]hen [it] ... continues in possession ... after the expiration of

the term for which it is let . ... " The third subsection addresses nonpayment of rent.

That subsection provides that a tenant is guilty of unlawful detainer

              (3) When he or she continues in possession in person or by
       subtenant after a default in the payment of rent, and after notice in writing
       requiring in the alternative the payment of the rent or the surrender of the
       detained premises, served (in manner in RCW 59.12.040 provided) in
       behalf of the person entitled to the rent upon the person owing it, has
       remained uncomplied with for the period of three days after service thereof.
       The notice may be served at any time after the rent becomes due.

RCW 59.12.030(3).

       FPA contends that the unlawful detainer provision for holdover tenants,

RCW 59.12.030(1), applies because Pendleton stayed in possession after FPA terminated

the lease. FPA argues that because the lease allowed for termination for nonpayment of

rent, and because FPA enforced that provision of the lease, the term ofthe lease had

expired. Thus, FPA maintains that the statutory provision provides a basis to find

Pendleton in unlawful detainer. We disagree. Because Terry requires us to construe

ambiguities in the unlawful detainer statute strictly in favor of tenants, we distinguish

"expiration ofthe term for which it is let" from a unilateral termination, such as what

occurred here. We thus hold that a landlord must comply with RCW 59.12.030(3)'s

notice and opportunity to cure procedures prior to bringing an unlawful detainer action

against a tenant whose lease it unilaterally terminated for nonpayment of rent.

                                             11 

No. 32705-1-111
FPA Crescent Assocs. v. Jamie's LLC

       RCW 59.12.030(1) has no application here because it applies only to tenants who

continue in possession "after the expiration of the term for which [the lease] is let." Even

if we were not charged with construing ambiguities in the unlawful detainer act strictly in

favor of tenants, we would hold that this construction is required by the plain language of

the statute. "Expiration" is defined in Black's Law Dictionary as "[t]he ending of a fixed

period of time." BLACK'S LAW DICTIONARY 700 (10th ed. 2009). "Let" means "[t]o

offer (property) for lease." BLACK'S, supra, at 1043. Thus, under the plain language of

the statute, a tenant is guilty of unlawful detainer if the tenant remains in possession of

property past the fixed period of time for which the property is leased.

       Thus, RCW 59.12.030(1) is applicable only after the expiration of the fixed term

as specified in the lease agreement. Here, the lease contained a fixed term of 90 months

with the option to extend for an additional fixed period. The initial 90 months had not

expired prior to FPA's summons for unlawful detainer. FPA could not rely on

RCW 59.12.030(1) to determine the right of possession.

       For FPA's unlawful detainer action, the applicable subsection for relief is

RCW 59.12.030(3). That subsection requires notice and a right to cure. The landlord

must give written notice requiring surrender of the detained premises or payment of the

delinquent rent within three days after service of the notice. The notice may be served at

any time after the rent becomes due. RCW 59.12.030(3). Notice must be served in

accordance with RCW 59.12.040. RCW 59.12.030(3). "In an action for unlawful

                                             12 

No. 32705-1-III
FPA Crescent Assocs. v. Jamie's LLC

detainer alleging breach of a covenant, a notice which does not give the tenant the

alternative of performing the covenant or surrendering the premises does not comply with

the provisions of the statute." Terry, 114 Wn.2d at 564. "Once a tenant is guilty of

unlawful detainer under RCW 59.12.030(3), a landlord may commence an unlawful

detainer action by service and filing of the statutory summons and complaint."

Christensen v. Ellsworth, 162 Wn.2d 365,371, 173 P.3d 228 (2007).

       The fact that the lease contained a right to terminate without notice does not

relieve FPA of providing such notice in an unlawful detainer provision. JejJries v.

Spencer, 86 Wash. 133, 149 P. 651 (1915) is instructive. In JejJries, the tenants and

landowner entered into a written lease for farmland for one year, with the option to renew

for one or more years. Id. The lease provided that in case of default in the payment of

any portion of the rent when due and 30 days thereafter, the lessors might reenter and

terminate the lease. Id. at 133-34. Less than one year into the lease, the tenant had not

paid rent and failed to fulfill other terms of the lease. Id. The landowner elected to

terminate the lease and notified the tenants to vacate the premises. Id. at 134. The next

month, the landlord brought an unlawful detainer action to recover the premises. Id. The

tenants contested the filing, contending that the landowner failed to give notice to pay

rent or vacate the premises as prescribed by the unlawful detainer statute. Id. at 134-35.

The trial court dismissed the case. Id. at 135.

                                             13
No. 32705-1-111
FPA Crescent Assocs. v. Jamie's LLC

       On appeal, the landlord contended that because the provision in the lease allowed

for its tennination at the lessor's option on default in payment of any rent for 30 days

after due, the statutory notice to quit or pay rent was unnecessary. The Jeffries court

disagreed. The court held that requiring notice for nonpayment would not interfere with

the forfeiture provision of the contract. Id. The court held that the three-day notice to

pay rent or quit is a condition precedent to instituting an unlawful detainer action where

re-entry is sought for nonpayment of rent. Id. at 136. "It is no hardship to require the

giving of the statutory notice as a condition precedent to invoking the benefit of the

statutory remedy." Id. Jeffries establishes that when a landlord seeks to recover a

property because of a tenant's nonpayment of rent, and relies on the unlawful detainer

statute as its basis, the tennination provision of a contract does not provide a basis for

circumventing the statutory requirements.

       Here, FPA did not give proper notice under RCW 59.12.030(3). Prior to serving

the unlawful detainer summons, FPA did not give Pendleton notice to pay the delinquent

rent or surrender the premises. Due to the defective notice, FPA could not obtain relief

under the unlawful detainer statute. We reverse the trial court's grant of summary

judgment to FPA, hold that Pendleton was not guilty of unlawful detainer, and dismiss

FPA's unlawful detainer action against Pendleton.

       In its reply brief, Pendleton requests relief pursuant to RCW 59.12.090. An issue

raised and argued for the first time in a reply brief generally will not be decided by an

                                              14 

No. 32705-1-III
FPA Crescent Assocs. v. Jamie's LLC

appellate court. Cowiche Canyon Conservancy v. Bosley, 118 Wn.2d 801, 809, 828 P.2d

549 (1992). But see State v. State v. Haberman, 105 Wn. App. 926, 933, 22 P.3d 264

(2001) (RAP 1.2(c) allows an appellate court to review an issue first raised in a reply

brief if the ends ofjustice so require.). Because Pendleton first requested this remedy in

its reply and gave no opportunity for FPA to respond, we will not consider what the

proper remedy is for this court's dismissal ofFPA's unlawful detainer action. Rather, we

remand to the trial court for it to consider this issue after proper briefing and argument.

       Reverse and remand.

WE CONCUR: 

Fearing, J.

                                             15