Court Opinion

ID: 9898139
Source: CourtListenerOpinion
Date Created: 2023-11-14 19:28:43.61642+00
Date Added: 2024-06-11T09:15:18.345825
License: Public Domain

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

 DEREK EDMONDS AND JUILING
 EDMONDS, individuals,                          No. 83995-1-I

                     Appellants,                DIVISION ONE

              v.                                UNPUBLISHED OPINION

 APEX TTF BELLEVUE, LLC, a
 Washington Limited Liability Company,

                     Respondent.

      MANN, J. — This appeal arises from a lease agreement with an option to

purchase for a residential property. The lessees, Derek and Juiling Edmonds, sued the

property owner, Apex TTF Bellevue, LLC (Apex) for breach of contract, specific

performance, and damages. The Edmonds appeal the trial court’s summary judgment

dismissal of the claims. We affirm.

                                           I

                                          A

      In December 2018, the Edmonds leased residential property in Bellevue from

Apex (the property). The Edmonds and Apex entered into a lease and rental agreement
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(lease) with a lease term of January 1, 2019, to March 31, 2020. The lease required the

Edmonds to pay $7,500 per month for the lease term.

       The parties also entered an addendum to the lease (addendum). The addendum

granted the Edmonds an option to purchase the property on specified terms (option).

The option allowed the Edmonds to purchase the property by the end of the lease term

for $2,475,000 after giving 60 days’ written notice to Apex. The option provided for

credit against the purchase price for rent paid as well as certain improvements done by

the Edmonds. If the Edmonds exercised the option, they were required to close the

purchase within 60 days, but not later than the expiration of the lease term.

       The addendum also allowed the Edmonds to extend the lease term for an

additional year, through March 31, 2021. During the extended lease term, Apex had the

right to market the property for sale, subject to a right of first refusal granted to the

Edmonds. In January 2020, the Edmonds extended the lease for an additional year.

Consistent with the terms of the addendum, when the lease term was extended, the

purchase price for the option increased to $2,600,000.

       In October 2020, the Edmonds e-mailed Apex’s property manager, Ben Williams,

informing him that they were submitting mortgage applications, and asked if Williams

could prepare a purchase and sale agreement under the terms of the option.

       In November 2020, the Edmonds e-mailed Williams and stated that the option

enables them to purchase the property at the previously agreed upon price until the

expiration of the lease term on April 1, 2021. The Edmonds attached a purchase and

sale agreement (November PSA) and stated that they were looking to finance their

purchase. During their discussions, Williams let the Edmonds know that Apex had

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contacted Doug Perry, at Wallick & Volk, and let him know that the Edmonds were

looking for preapproval. When Williams e-mailed the Edmonds at the end of December

2020 to check on the progress of financing, the Edmonds stated that they were still

waiting to hear back on the mortgage application, but that they “will be exercising the

option to purchase within the next 30 days.”

      On January 29, 2021, the Edmonds e-mailed Williams stating that they were

providing formal notice that they were exercising the option. The Edmonds asserted

that “[a]ccording to the agreement, the parties are to enter into a Purchase and Sale

Agreement with closing to take place within 60 days, prior to April 1, 2021.” In

response, on February 8, 2021, Williams explained by e-mail that Apex viewed the

earlier November PSA as a written notice to exercise the option, and because 60 days

had passed since the submission of the offer, Apex considered the option to have

expired because the purchase had not closed. Nevertheless, Apex expressed its

willingness to continue discussing the option with the Edmonds and let them know that

Apex’s preference had always been to amicably sell the property to the Edmonds.

      On or about February 10, 2021, Apex listed the property for sale in the event that

the Edmonds did not purchase it by the end of the lease term. Meanwhile, the

Edmonds continued to work with Wallick & Volk to secure financing as late as March 3,

2021. On February 12, 2021, Apex received an offer from a third party to purchase the

property, but it was contingent upon the Edmonds’ failure to complete the purchase by

March 31, 2021.

      On February 15, 2021, counsel for Apex wrote to the Edmonds and, consistent

with the February 8, 2021 e-mail, informed the Edmonds that it considered their ability

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to exercise the option expired on January 15, 2021, because they had not closed within

60 days of their November 16, 2020 notice of intent to exercise the option. The letter

also notified the Edmonds that it had received a bona fide offer from a third party to

purchase the property for $2,700,000 including an earnest money deposit of $81,000.

The letter informed the Edmonds that they had five business days to review the offer

and decide whether to exercise their right of first refusal under the addendum. The next

day, the Edmonds rejected the assertion that their November 16, 2020 offer was an

exercise of the option and argued that the option did not expire.

       On February 18, 2021, counsel for Apex left a voicemail with the Edmonds’

counsel, stating that Apex would honor the option to purchase. The phone call was

followed by an e-mail the next day confirming that Apex would honor the option to

purchase. On February 22, 2021, Apex’s counsel e-mailed the Edmonds’ counsel a

proposed purchase and sale agreement, which was substantially consistent with the

terms of the option plus a $100,000 earnest money requirement. Apex also attached a

60-day Notice of Intent to Sell Property (notice) and explained that such a notice served

as a precaution to allow Apex to proceed with selling the property to a third party if the

Edmonds could not close their purchase by March 31, 2021. The next day, the

Edmonds requested several revisions to the proposed purchase and sale agreement,

including more time to close. Apex provided a revised purchase and sale agreement

(February PSA) that removed the earnest money requirement and made other changes

requested by the Edmonds—except for the change in closing date. While Apex

accepted changes that were consistent with the option, it pointed out that closing must

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No. 83995-1/5

occur within 60 days after the Edmonds exercise the option, but “not later than March

31, 2021.”

        On February 24, 2021, the Edmonds wrote Apex explaining that because Apex

had rejected the option to purchase until February 22, the Edmonds were unable to

seek funding and therefore the closing date should be extended to April 23, 2021—

beyond the term of the lease. Apex responded, reminding the Edmonds that under the

terms of the option, closing was to occur within 60 days of exercising the option “but not

later than the expiration of the lease term on March 31, 2021.”

        On February 26, 2021, the Edmonds sent another letter to Apex stating that they

were entitled to close the purchase by April 26, 2021. In response, Apex reiterated that

the remaining terms that the Edmonds insisted be included in the February PSA differed

from the option, but that it was willing to close by March 31, 2021. On March 6, 2021,

Apex opened title with First American Title as required by the option. In response, the

Edmonds’ counsel informed Apex’s counsel that they had filed a lawsuit. 1 On March 24,

2021, Apex wrote to the Edmonds to let them know that it was working to clear a defect

found on the title. In response, the Edmonds’ counsel stated that the Edmonds were

prepared to close, provided Apex accepts responsibility for damages it has caused.

Apex responded that the only disputed term was the closing date and explained that the

option specified that closing must occur no later than March 31, 2021. On March 30,

Apex e-mailed the Edmonds and reiterated that Apex remained prepared to sell the

property to the Edmonds under the option.

        1 On March 24, 2021, the Edmonds recorded a lis pendens against the property at the King

County Recorder’s Office, but Apex successfully quashed the lis pendens following the dismissal of the
Edmonds’ claim for breach of contract and specific performance.

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No. 83995-1/6

       The extended lease term expired on March 31, 2021. The Edmonds failed to

sign the February PSA or deposit the required funds into escrow by this date although

both actions were requirements of closing. Despite the expiration of the lease, the

Edmonds failed to vacate the property and made no further rental payments.

       On September 9, 2021, Apex received an unsolicited offer to purchase the

property for $2,925,000, but it could not accept the offer due to the pending litigation

and the offer expired. On October 26, 2021, Apex received a renewed offer from the

same buyer. The Edmonds exercised their right of first refusal and matched the

$2,925,000 offer. On December 8, 2021, the Edmonds closed their purchase of the

property.

                                              B

       The Edmonds sued Apex asserting nine causes of action, including breach of

contract and specific performance. In response, Apex asserted three counterclaims,

including breach of contract related to the lease and the option.

       On August 31, 2021, the trial court granted Apex’s motion for partial summary

judgment and dismissed the Edmonds’ claims with prejudice. The trial court concluded

that the Edmonds were not entitled to specific performance because they did not

perform their obligations under the addendum by failing to execute the February PSA

and tender the purchase price. The trial court also concluded that Apex did not breach

the addendum because Apex’s February 15, 2021 notice to the Edmonds of the third-

party offer and their right of first refusal did not anticipatorily repudiate the option. And

even if the notice was an anticipatory repudiation of the option, the trial court concluded

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No. 83995-1/7

that the Edmonds did not act in reliance on the notice and that Apex quickly withdrew

any repudiation.

      On October 26, 2021, the trial court granted Apex’s second motion for summary

judgment on its counterclaim for breach of contract. The trial court determined that the

Edmonds breached the option by failing to close their purchase by March 31, 2021 and

breached the lease by failing to vacate the property.

      Apex then moved to liquidate its damages, seeking damages equal to the

amount of its monthly mortgage and landscaping payments from April 1, 2021, to

December 8, 2021, the time during which the Edmonds refused to vacate the property

and failed to make rental payments. 2 The trial court denied Apex’s motion without

prejudice. The trial court then denied the Edmonds’ motion for partial summary

judgment on the same issue. In March 2022, the parties proceeded to trial before a jury

solely on the issue of damages. The jury found that Apex had been damaged by the

Edmonds in the amount of $55,295.

      The Edmonds appeal.

                                                   II

      The Edmonds argue that the trial court erred in granting summary judgment for

Apex on the breach of contract and specific performance claims because Apex

repudiated the contract and thus was the party in breach. We disagree.

      We review summary judgment orders de novo, considering the evidence and

reasonable inferences in the light most favorable to the nonmoving party. Keck v.

Collins, 184 Wn.2d 358, 370, 357 P.3d 1080 (2015). Summary judgment is proper

      2 In January 2022, the parties agreed to voluntarily dismiss their remaining claims.

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No. 83995-1/8

when no genuine issue of material fact exists and the moving party is entitled to

judgment as a matter of law. Keck, 184 Wn.2d at 370; CR 56(c). We “must view the

evidence, and all reasonable inferences from the evidence, in the light most favorable to

the nonmoving party, and the motion should be granted if a reasonable person could

reach only one conclusion.” Dunnington v. Virginia Mason Med. Ctr., 187 Wn.2d 629,

638 P.3d 498 (2017).

       Repudiation occurs when one party indicates that it will not perform its

contractual obligations. CKP, Inc. v. GRS Constr. Co., 63 Wn. App. 601, 620, 821 P.2d

63 (1991). While the question of anticipatory repudiation is one of fact, it can be

decided on summary judgment if, taking all evidence in the light most favorable to the

nonmoving party, reasonable minds can reach only one conclusion. Versuslaw, Inc. v.

Stoel Rives, LLP, 127 Wn. App. 309, 321, 111 P.3d 866 (2005). Anticipatory

repudiation must be a clear and positive statement or action that expresses an intention

not to perform the contract. Alaska Pac. Trading Co. v. Eagon Forest Prods., Inc., 85

Wn. App. 354, 365, 993 P.2d 417 (1997); Turner v. Gunderson, 60 Wn. App. 696, 703,

807 P.2d 370 (1991).

       But repudiation does not itself terminate a contract. Hemisphere Loggers &

Contractors, Inc. v. Everett Plywood Corp., 7 Wn. App. 232, 234, 499 P.2d 85 (1972). A

repudiating party, who is not otherwise in default, may withdraw its repudiation if the

other party has not acted in reliance on the repudiation and there has been no material

change in position in reliance upon the repudiation. Hemisphere Loggers, 7 Wn. App.

at 234. As a result, we need to answer three questions: (1) did Apex repudiate the

option, (2) if so, was the repudiation withdrawn, and (3) if so, did the Edmonds act in

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No. 83995-1/9

reliance on the repudiation or otherwise materially change their position based on the

repudiation.

                                               A

       The Edmonds argue that Apex expressly repudiated the contract on February 8,

2021, when Apex’s agent e-mailed the Edmonds that “the tenant’s Option rights may be

viewed as now being defunct and expired.” We agree.

       Apex responds that it did not expressly repudiate the contract because it

considered the Edmonds’ submission of the November PSA as their written notice to

exercise the option. Because Derek Edmonds sent the November PSA on November

16, 2020, and had 60 days to close after his exercise of the option, Apex viewed the

option to have expired.

       The February 8, 2021 e-mail states that the Edmonds’ option rights are defunct

and expired. More importantly, the February 15, 2021 letter expressly states that the

Edmonds’ option to purchase had expired and Apex was instead giving the Edmonds a

right of first refusal to the third-party offer. Viewed in the light most favorable to the

Edmonds, we conclude that Apex’s February 15, 2021 letter enclosing the third-party

offer was an express repudiation of the option to purchase.

                                               B

       Apex argues that any repudiation was withdrawn by February 19, 2021—four

days after the written repudiation. We agree.

       On February 19, 2021, Apex’s counsel e-mailed the Edmonds’ counsel stating

that “Apex will honor the Option to Purchase. It will have a draft Purchase and Sale

Agreement for Mr. Edmonds review on Monday.”

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No. 83995-1/10

       On February 22, 2021, Apex sent the Edmonds a signed PSA with the original

purchase price of $2,600,000. And after the Edmonds called Apex’s attention to several

errors, including the addition of a $100,000 earnest money deposit, Apex responded

that same day with the revised February PSA removing the earnest money and giving

proper credit for rental payments made. While Apex did not change the closing date as

demanded by the Edmonds, it used the original closing date from the option, March 31,

2021, because the addendum specifies that closing must occur “not later than the

expiration of the term of the lease.” Thus, the record shows that Apex fully retracted the

repudiation by February 23, 2021.

       Further, Apex opened title with First American Title, informed the Edmonds that it

was working to clear a defect found on the title, and reiterated that it remained prepared

to sell the property to the Edmonds. These statements and actions are a clear

indication of Apex’s willingness to perform its side of the contract.

       Even though Apex had fully retracted its repudiation, the Edmonds failed to take

the necessary steps to close the purchase of the property by not executing the February

PSA and tendering the purchase price.

                                             C

       The Edmonds argue that Apex could not withdraw its repudiation because they

relied on the repudiation and stopped trying to procure the purchase money by selling

their securities, other property, or otherwise liquidating their accounts. Because they

changed their position based on the repudiation, the Edmonds assert that any

attempted retraction by Apex was invalid. We disagree.

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No. 83995-1/11

       The Edmonds did not rely on the repudiation or materially change their positions.

When Derek Edmonds sent the November PSA to Apex, he also specified that the

Edmonds were looking to finance their purchase. Apex provided a referral to the

Bellevue branch of Wallick & Volk. When Williams inquired on behalf of Apex near the

end of 2020 as to whether the Edmonds had been able to secure financing, Derek

Edmonds responded that he was still waiting for news from Doug Perry at Wallick &

Volk, about the mortgage application. Thus, the Edmonds had been looking to finance

their purchase since November 2020, but they could not secure financing as late as

March 3, 2021. Although the Edmonds claim that they stopped trying to procure the

purchase money because Apex repudiated, the Edmonds failed to provide any evidence

reflecting that they acted in reliance on the repudiation.

       In addition, on February 18, 2021, counsel for the Edmonds wrote to counsel for

Apex demanding that Apex honor the original option to purchase. The letter does not

say that the Edmonds in any way changed their position based on Apex’s February 15

repudiation.

       Because there is no evidence that the Edmonds relied on the repudiation, Apex

could, and did, withdraw its repudiation. Thus, even taking all evidence in the light most

favorable to the Edmonds, there is no genuine issue of material fact as to whether Apex

withdrew its repudiation and whether the Edmonds materially changed their position

based on the repudiation. The trial court did not err by granting summary judgment and

dismissing claims for breach of contract and specific performance.

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No. 83995-1/12

                                            III

      The Edmonds also argue that the trial court erred in denying summary judgment

on damages. The Edmonds argue that because Apex ultimately received $2,925,000—

$325,000 more than the originally bargained for price of $2,600,000—it sustained no

damages. We disagree.

      An order denying summary judgment, based on the presence of material,

disputed facts, will not be reviewed when raised after a trial on the merits. Johnson v.

Rothstein, 52 Wn. App. 303, 306, 759 P.2d 471 (1988).

      Here, the Edmonds cannot appeal the order denying summary judgment on

damages simply because Apex sustained “no damages.” Contrary to what the

Edmonds claim, Apex sustained damages when the Edmonds failed to vacate the

property or pay rent after the lease expired—between April 1, 2021, and December 8,

2021. More importantly, after a trial on the merits, the jury found that Apex had been

damaged by the Edmonds in the amount of $55,295. Thus, given that a jury determined

the factual issues in dispute, the Edmonds cannot appeal the trial court’s order denying

summary judgment regarding damages.

                                            IV

      Apex requests attorney fees and costs on appeal under RAP 18.1 and the lease.

RAP 18.1 provides that this court may award reasonable attorney fees on appeal if

applicable law grants the party the right to such fees. A contractual provision for an

award of attorney fees at trial supports an award of attorney fees on appeal. W. Coast

Stationary Eng’rs Welfare Fund v. City of Kennewick, 39 Wn. App. 466, 477, 694 P.2d

1101 (1985).

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No. 83995-1/13

      The lease provides the following provision regarding attorney fees:

      ATTORNEYS FEES / VENUE AND JURISDICTION: As provided by law
      and except as otherwise prohibited, the prevailing party shall be entitled to
      recover its reasonable attorneys fees and court costs incurred in the event
      any action, suit or proceeding commenced to enforce the terms of this
      Agreement.

As the prevailing party on appeal, upon compliance with RAP 18.1, Apex is entitled to

reasonable attorney fees and costs on appeal.

      We affirm.

WE CONCUR:

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