Court Opinion

ID: 4222119
Source: CourtListenerOpinion
Date Created: 2017-11-20 20:20:42.36246+00
Date Added: 2024-06-11T14:41:56.451853
License: Public Domain

FILED
                                                                COURT OF APPEALS DIV I
                                                                 STATE OF WASHINGTON

                                                                2017 NOV 20 AM 8:53

          IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

JAMES W. CHERBERG AND NAN               )       No. 75276-6-1
CHOT CHERBERG,                          )
                                        )
                    Respondents,        )
                                        )       DIVISION ONE
                    v.                  )
                                        )
HAL E. GRIFFITH and JOAN I.             )
GRIFFITH, husband and wife,             )       UNPUBLISHED OPINION
                                        )
                    Appellants.         )       FILED: November 20, 2017
                                        )

       MANN, J. — Nan and James Cherberg sued Hal and Joan Griffith, their next-door

neighbors, seeking specific performance of the Griffiths' promise to execute a joint use

agreement that would allow the Cherbergs to build a dock within 35 feet of the Griffiths'

existing dock. The trial court granted summary judgment and ordered specific

performance in favor of the Cherbergs. The Griffiths appeal. Because we find a

genuine dispute of material fact as to what the parties intended In the purchase and sale

agreement, we reverse and remand for trial.

                                         FACTS

      The Griffiths have lived on Mercer Island's northern shore since 1996. In

February 2012, the Griffiths purchased the next-door property from their neighbor
No. 75276-6-1/2

Sandra Dunn. Prior to purchasing the Dunn property, the Griffiths and Dunns shared

the use of a dock that straddled their common property boundary under a joint dock

agreement. After buying the former Dunn property, the Griffiths burdened the property

with two exclusive-use easements that benefitted the Griffiths' property: an easement

securing the use of the existing dock and an easement securing the exclusive use of a

small promontory between the two properties.

       After the easements were recorded, the Griffiths listed the property for sale

through real estate agent Kris Robb. The listing specifically stated that it was a "no

dock property." Robb was contacted by former clients, Nan and James Cherberg, who

expressed interest in buying the property. The Cherbergs asked Robb to serve as a

duel agent. Robb informed the Cherbergs of the two exclusive-use easements. The

Cherbergs responded that they wanted to build a small dock and would need the

Griffiths' cooperation. Robb relayed to the Griffiths the Cherbergs' interest in building a

small dock. The Griffiths indicated that they would have no objection to a modest dock

as long as it did not interfere with the use of their own dock.   •

        On June 5,2012, the Cherbergs submitted an offer through a purchase and

sale agreement. The next day the Griffiths accepted the offer by countersigning the

purchase and sale agreement, putting the property under contract pending inspection.

The signed purchase and sale agreement included an addendum providing in part:

       Sellers hereby agree to assist Buyers in their effort to obtain a dock
       permit. They agree not to challenge in any way the Buyers solicitation of
       said permit.

                                          -2-
No. 75276-6-1/3

        Sellers hereby agree to allow Buyers to encroach into the normal 35 foot
        setback between docks to no closer than 25 feet.[1] This may entail
        changing the easement which is in place regarding the landscape on the
        Western most property along the waterfront. Sellers agree to cooperate
        with Buyers in order to obtain a permit for a dock along the Western line of
        the property.

        On June 6, the same day the parties executed the purchase and sale agreement,

the Cherbergs' dock contractor, Ted Burns, e-mailed the Cherbergs to inform them that

they would need to enter into a joint use agreement with the Griffiths in order to build a

dock:

        [T]he Joint Use Agreement with the [Griffiths] should allow us to be within
        20' of their existing dock, and it would be even better if we could be within
        15'. In addition, it should address either the removal of the [existing
        floating dock] or the ability to locate within 5' of the floats.

Burns's e-mail included a sketch of the proposed dock, a plot showing the lot lines, and

a blank form joint use agreement from the City of Mercer Island.

        On June 13, 2012, the Cherbergs sent the Griffiths a new proposed addendum.

This second addendum was accompanied by the June 6 e-mail from Burns to Cherberg,

including the plot showing the property lines, the sketch of the proposed dock, and the

blank form joint use agreement. The copy of Burns's e-mail that the Griffiths received

was annotated by Robbs with the words,"This is a general proposal but is not binding

but nothing will happen but to code."

        On June 23, 2012, the parties agreed to, and finalized the second addendum,

which provided in part:

        Seller acknowledges receipt of the NEW DOCK email copy from Ted
        Burns outlining the proposed dock Buyer intends to pursue. Seller further

        1 The Griffiths struck this language before signing.
                                                  -3-
No. 75276-6-1/4

      acknowledges the receipt of a copy of the lateral lines plot from King
      County Records and the proposed Dock sketch.

      Seller further agrees to sign a Joint Use Agreement as attached which will
      allow the Buyer to place the proposed dock within the 35 foot setback
      usually required.

      The day after the second addendum was executed, James Cherberg sent Robbs

an e-mail reflecting his uncertainty about the dock:

      I was operating under impression they were going to remove the floating
      dock and move it elsewhere, and not just reconfigure it and leave in same
      place. I have some notes from a conversation you and I had about Mr.
      and Mrs. Griffith "have no problem" to "take away floating dock." A couple
      of sub-issues here:

          a. The most important one to me is the encroachment Hal has agreed
          to. Leaving the floating dock in place might make the permitting more
          difficult. . . .

          b. If floating dock stays, how close will he allow us to encroach? Does
          the Corps have any say in this? Are the Griffiths willing to move it if
          necessary?

The purchase and sale agreement closed on June 30, 2012. The parties did not

execute a joint use agreement at closing.

       Over the next six months, the Cherbergs and Griffiths continued to discuss the

size and location of the Cherbergs' proposed dock without reaching agreement. On

January 11, 2013, the Cherbergs' attorney, Charlie Klinge, e-mailed the Griffiths'

attorney, Shannon Sperry, with an update:

      Dock: The dock issues are complex which is typical due to the multiple
      agencies and regulations involved, and of course the narrow site is
      challenging. I talked to Jim [Cherberg] about getting a final dock layout
      that Griffith can review and then make comments on and/or approve. Jim

      2 The   Griffiths struck this language before signing.
                                                 -4-
No. 75276-6-1/5

       has been going through various options with the dock designer to balance
       all the issues: personal desires, neighbors, and agencies. It seemed to
       me that Jim needed to come to conclusions and then present that to the
       Griffiths. So, that will take a bit more time.
       I think we should let Jim focus on finalizing a dock plan. Once Cherberg
       and Griffith are agreed on the dock location, then we can look at the Joint
       Use Agreement, etc.

       On January 21, James Cherberg wrote to the Griffiths to update them about the

status of the dock's design:

       I have asked [the dock builder] Seaborn to provide a detailed scaled
       drawing of this location and access to the dock and its acceptability to you.
       In this location it would still be necessary, however, to meet Mercer
       Island's Joint Agreement Use(on both sides of the dock). I have Cc'cd
       this e-mail to my attorney to keep him in the loop, as you have requested
       Shannon Sperry review M.I's Agreement with him after we've agreed on
       the dock location and access.

       That same day in an e-mail to Burns, Cherberg acknowledged that the Griffiths'

consent was necessary before he moved forward on a dock design:

       Per our discussion Fri., I'd like a detailed drawing provided by [the
       surveyor] M.W. Marshall of the proposed dock location, access, and
       configuration. But before we do, I think we should meet again and I'd be
       most comfortable in having him present—perhaps even on site, if not at
       your office—so we can all be very specific and get this drawing done. I
       will need to get Hal Griffith's verbal agreement as to location before having
       Marshall begin his drawing.

        In April 2013, the Cherbergs applied for a permit with the U.S. Army Corps of

Engineers (Corps)to build a dock, install two ground-based boatlifts, and plant native

shoreline vegetation.3 The proposed dock drawing submitted to the Corps was similar

to the sketch provided to the Griffiths with the second addendum, but was larger and

approximately 5 feet closer to the Griffiths' dock.

        3 Proposals to construct new docks are subject to review by the Corps as well as the City of
Mercer Island. The Corps reviews proposed docks for, among other factors, their impact on navigability
and feasibility of vessels to approach and tie up to existing docks.
                                                -5-
No. 75276-6-1/6

       In January 2014, the Corps questioned the size and proximity of the proposed

dock to the Griffiths' dock and resulting interference with the Griffiths' use of their dock:

       It appears that the Griffiths['] pier north of the project is on the Cherberg
       property, as you stated. It seems that 18.5 feet would be insufficient room
       for the Griffith family to use their pier, especially since a large pier like that
       could accommodate a larger vessel.

On January 29, Burns replied that "[t]he Proposed pier location was discussed with the

Griffiths as part of purchasing the property and they agree with the location."

       In February 2014, the Corps informed Burns that it had sent the proposal out for

agency and tribal comment and that there was "significant concern about the proximity

of the Griffiths['] pier and the proposed pier." Three months later, in May 2014, the

Corps again asked about the proximity: "Does Mr. Griffith have any objections to the

proposed pier?" Burns forwarded this question along to James Cherberg and asked

him for "the wording you'd like me to use in responding to [the Corps]." Cherberg

responded, "Like we talked before, this language to [the Corps] is fine: 'Mr. Cherberg

intends to construct[a] dock included in the Purchase and Sale Agreement between

himself and [Griffith]." In July 2014, the Corps issued the permit.

       In November 2014, the Cherbergs' attorney sent a demand letter for the

execution of a joint use agreement. The demand letter included a proposed joint use

agreement and a copy of the new dock design submitted to the Corps and City of

Mercer Island. The Griffiths refused to sign the proposed joint use agreement. Instead,

the Griffiths proposed the Cherbergs build a smaller dock with greater separation from

their own dock. The Cherbergs rejected the Griffiths' proposed dock.

                                            -6-
No. 75276-6-1/7

       The Cherbergs filed suit in May 2015, seeking specific performance to compel

the Griffiths to sign the joint use agreement. Following discovery and briefing, in April

2016, the trial court granted the Cherbergs' motion for summary judgment finding that

the Griffiths had breached the purchase and sale agreement. The trial court then

denied the Griffiths' motion for reconsideration and granted the Cherbergs' motion for

specific performance. The Griffiths appeal.

                                         ANALYSIS

                                     Standard of Review

       We review an order granting summary judgment de novo, viewing the facts and

all reasonable inferences in the light most favorable to the nonmoving party. Hearst

Commc'ns, Inc. v. Seattle Times Co., 154 Wash. 2d 493, 501, 115 P.3d 262(2005).

Summary judgment is appropriate only where there are no genuine issues of material

fact and the moving party is entitled to judgment as a matter of law. CR 56 (c), Hearst,
154 Wash. 2d at 501. "In the contract interpretation context, summary judgment is not

proper if the parties' written contract, viewed in the light of the parties' other objective

manifestations, has two or more reasonable but competing meanings." Renfro v. Kaur,

156 Wash. App. 655, 661, 235 P.3d 800(2010)(internal quotations omitted).

       When a party seeks specific performance of a contract, rather than damages, a

higher standard of proof must be met: "clear and unequivocal evidence that leaves no

doubt as to the terms, character, and existence of the contract." Kruse v. Hemp, 121
Wash. 2d 715, 722, 853 P.2d 1373(1993)(internal quotations and citations omitted).

When reviewing a summary judgment decision involving a heightened standard of

proof, we "must view the evidence presented through the prism of the substantive

                                            -7-
No. 75276-6-1/8

evidentiary burden." Kofmehl v. Baseline Lake, LLC, 167 Wash. App. 677, 694, 275 P.3d
328 (2012), aff'd, 177 Wash. 2d 584, 601, 305 P.3d 230(2013). Even when "the evidence

points strongly to" one party's reading of the contract, summary judgment granting

specific performance should be denied if "the evidence is not so strong as to foreclose

all other interpretations." Kofmehl, 177 Wash. 2d at 601.

                                 Contract Interpretation

      "The touchstone of contract interpretation is the parties' intent." Tanner Elec. V.

Puget Sound Power & Liqht Co., 128 Wash. 2d 656, 674, 911 P.2d 1301 (1996).

Washington follows the "objective manifestation theory" of contract interpretation. "[W]e

attempt to determine the parties' intent by focusing on the objective manifestations of

the agreement, rather than on the unexpressed subjective intent of the parties." Hearst,
154 Wash. 2d at 503. "We generally give words in a contract their ordinary, usual, and

popular meaning unless the entirety of the agreement clearly demonstrates a contrary

intent." Hearst, 154 Wash. 2d at 504.

      To assist in determining the parties' intent, we also apply the "context rule"

adopted in Berg v. Hudesman, 115 Wash. 2d 657, 669, 801 P.2d 222(1990). This rule

"allows examination of the context surrounding a contract's execution, including the

consideration of extrinsic evidence to help understand the parties' intent." Viking Bank

v. Firarove Commons, 183 Wash. App. 706, 713, 334 P.3d 116 (2014). The court may

consider a variety of extrinsic evidence including:(1) the subject matter and objective of

the contract,(2) the circumstances surrounding the making of the contract,(3) the

subsequent conduct of the parties,(4)the reasonableness of the parties' respective

interpretation,(5) statements made during preliminary negotiations,(6) usages of trade,

                                         -8-
No. 75276-6-1/9

and (7)the course of dealing between the parties. Spectrum Glass Co., Inc. v. Pub.

Util. Dist. No. 1 of Snohomish County, 129 Wash. App. 303, 311, 119 P.3d 854(2005).

"Extrinsic evidence may be considered regardless of whether the contract terms are

ambiguous." King v. Rice, 146 Wash. App. 662, 671, 191 P.3d 946 (2008). "But extrinsic

evidence may not be used to (1) establish a party's unilateral or subjective intent as to

the meaning of a contract word or term;(2) to show an intention independent of the

instrument; or (3) to vary, contradict, or modify the written word." Renfro, 156 Wash. App.

at 662-63 (internal quotations omitted).

       Contract interpretation is a question of law and appropriate for summary

judgment "only when (1)the interpretation does not depend on the use of extrinsic

evidence, or (2) only one reasonable inference can be drawn from the extrinsic

evidence." Tanner, 128 Wash. 2d at 674. Summary judgment is "inappropriate when more

than one reasonable inference can be drawn from the extrinsic evidence." Kelley v.

Tonda, 198 Wash. App. 303, 313, 393 P.3d 824 (2017).

                           The Purchase and Sale Agreement

       The Griffiths argue that the trial court erred in granting summary judgment and

ordering specific performance because the purchase and sale agreement itself, and

extrinsic evidence, support competing inferences as to the parties' intent.

A.     The Purchase and Sale Agreement is Ambiguous

       The Cherbergs sought specific performance to enforce the following language in

the addendum to the purchase and sale agreement:

       Seller acknowledges receipt of the NEW DOCK email copy from Ted
       Burns outlining the proposed dock Buyer intends to pursue. Seller further

                                           -9-
No. 75276-6-1/10

         acknowledges the receipt of a copy of the lateral lines plot from King
         County Records and the proposed Dock sketch.

         Seller further agrees to sign a Joint Use Agreement as attached which will
         allow the Buyer to place the proposed dock within the 35 foot setback
         usually required.

The Cherbergs assert that the intent of this language is unambiguous—that the Griffiths

agreed to sign a joint use agreement for any dock they could get approved anywhere

within the 35-foot setback, apparently without consideration of the resulting impact it

would have on the Griffiths' use of their existing dock. We disagree.

         The language in the addendum is far from unambiguous. The addendum refers

to "the proposed dock" but then fails to describe the proposed dock. While the blank

form joint use agreement references a drawing of the proposed dock as "Attachment C,"

there was no attachment included with the addendum. The only drawing provided to

the Griffiths was the sketch attached to the June 6 e-mail from the Cherbergs'

contractor Ted Burns. The sketch, however, is for a dock that is both smaller than, and

farther away from the Griffiths' dock, than the dock the Cherbergs ultimately permitted.

It is unreasonable to believe that the parties agreed to approval of an undefined dock.

On its face, the addendum is ambiguous as to the size or location of "the proposed

dock."

B.       Extrinsic Evidence

         The Griffiths assert that extrinsic evidence supports an inference that the parties

intended future discussions and agreement on the precise location of "the proposed

dock." There are several lines of extrinsic evidence that, viewed in a light most

favorable to the Griffiths, support the Griffiths' interpretation.

                                            -10-
No. 75276-6-1/11

       At the outset, it was evident during the initial negotiations leading up to the

purchase and sale agreement that the Griffiths were not willing to allow significant

impact to their existing dock. They initially listed the property as a "no dock" property.

After the Cherbergs expressed interest in a building a small dock, the Griffiths agreed

that they would not object to a modest dock so long as it did not interfere with their

dock. These preliminary discussions support an inference that the parties intended to

cooperate and reach agreement.

       Moreover, there is ample extrinsic evidence of the parties' subsequent conduct to

support an inference that they intended to continue discussions and reach agreement.

First, the day after the parties finalized and signed the second addendum, James

Cherberg sent realtor Robbs an e-mail expressing concern about whether the Griffiths

would move their float, and if not, how close could they encroach. Second, six months

later, on January 11, 2013, the Cherbergs' attorney e-mailed the Griffiths' attorney with

an update concerning the ongoing permitting process. The e-mail concluded,"Once

Cherberq and Griffith are agreed on the dock location, then we can look at the Joint Use

Agreement, etc."4 Third, ten days later, James Cherberg e-mailed the Griffiths with his

own status update. Cherberg explained that he would have his dock builder provide "a

detailed scaled drawing of this location and access to the dock and its acceptability to

you." The e-mail continued, "1 have Cc'ed this email to my attorney to keep him in the

loop, as you have requested [your attorney] review [the joint use agreement] with him

after we have agreed on the dock location and access."5 And finally, that same day,

       4(Emphasis   added.)
       5(Emphasis added.)

                                          -11-
No. 75276-6-1/12

Cherberg e-mailed his dock designer asking for a detailed drawing by his surveyor M.W.

Marshall, showing the proposed dock location, access, and configuration. Cherberg

explained, "I will need to get Hal Griffith's verbal agreement as to location before having

Marshall begin his drawing."6

       Construing the evidence and all reasonable inferences in favor of the Griffiths,

the nonmoving parties, the purchase and sale agreement as well as the subsequent

conduct of the parties supports at least a reasonable inference that "the proposed dock"

was not yet final at the time that the purchase and sale agreement was signed and that

the parties expected to continue discussions and reach agreement on the size and

location of the dock. Thus, because there are at least two reasonable competing

interpretations of the purchase and sale agreement, summary judgment was not

appropriate. Renfro, 156 Wash. App. at 661.

       The Griffiths argue also that the Cherbergs acted in bad faith by making

misrepresentations to the Army Corps of Engineers during the permitting process

thereby barring the Cherbergs from equitable relief, including specific performance.

Because we are remanding for trial, we decline to address this issue on summary

judgment.7

        We affirm the order denying the Griffiths' partial motion for summary judgment,

reverse the order granting the Cherbergs' motion for summary judgment and ordering

specific performance, and remand for trial.

       6(Emphasis added.)
       7 During oral argument and in postargument letters submitted to the court, the parties disputed
whether the right to a dock was a material term of the purchase and sale agreement. Because this
argument was not raised below, and not briefed on appeal, we decline to address it.
                                                -12-
No. 75276-6-1/13

WE CONCUR:

                   -13-