Court Opinion

ID: 4518774
Source: CourtListenerOpinion
Date Created: 2020-03-23 19:19:57.198418+00
Date Added: 2024-06-11T09:24:24.143137
License: Public Domain

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

 TIM GRAHAM,                                  No. 79523-6-I

                             Respondent,      DIVISION ONE

              v.                              UNPUBLISHED OPINION

 PARK SANG HO and PARK JUNG
 MYUNG, and their marital community,

                            Appellants.

      CHUN, J. — On May 13, 2016, Tim Graham entered into a real estate

transaction (Transaction) to lease, with an option to purchase, a property in

Sedro-Wooley (Property) from Park Sang Ho for $1,024,000. Under the

agreements comprising the Transaction, Graham would make a $60,000 option

payment, lease the Property for two years, and take full ownership by July 1,

2018, should he exercise the option and pay the purchase price. The parties

agreed that Graham’s obligations were contingent on his assumption of Park’s

$450,000 mortgage on the Property with Pacific City Bank (Bank). However,

after Graham took possession of the Property under the lease, he learned that

the Bank would not allow the assumption. After unsuccessfully seeking

alternative modes of financing the purchase, Graham informed Park that he

sought rescission of the agreements and refund of his $60,000 option payment.

Park denied his request.

      Graham sued Park seeking rescission and a refund. The parties brought
No. 79523-6-I/2

cross-motions for summary judgment. The trial court denied Park’s motion and

granted Graham’s. The trial court concluded that Graham’s claim justified

rescission and ordered refund of the $60,000 option payment. It reasoned that

the Bank’s unwillingness to allow assumption of the mortgage constituted a

failure of a material term of agreements comprising the Transaction. The trial

court also awarded Graham attorney fees and costs. Park appeals.

       Because the Bank’s unwillingness to allow an assumption of the mortgage

rendered a basic understanding1 of the Transaction impossible, we affirm. We

also affirm the trial court’s award of attorney fees and costs, and award Graham

fees and costs on appeal.

                                  I. BACKGROUND

       On May 13, 2016, Graham and Park entered into several agreements

regarding the purchase of the Property: (1) a lease agreement; (2) an option

agreement; and (3) a purchase and sale agreement (PSA), including a

“Financing Addendum” and a “First Addendum.” The option agreement was part

of the lease, and the PSA was attached to the option agreement as Exhibit B.

On August 7, 2016, the parties entered into a “Second Addendum” to the lease

agreement. Graham initially planned to redevelop the Property after purchase.

   A. Lease Agreement

       Under the lease agreement, Graham agreed to rent the Property until the

       1
        To avoid confusion, we use the term “understanding” here in lieu of
“assumption,” since, coincidentally, this case involves the assumption of a loan. Where
so used, the term refers to the assumption of the parties as expressed in the
Transaction.

                                           2
No. 79523-6-I/3

July 1, 2018 closing date. Graham agreed to make 24 monthly payments of

$1,000 to Park. The parties additionally agreed that the rent payments under the

lease would go towards the purchase price.

   B. Option Agreement

       As a part of the lease agreement, the parties also executed an option

agreement under which Graham agreed to pay $60,000 towards the purchase

price of the Property. The parties agreed that a $10,000 earnest money payment

from the PSA—addressed below—would become part of the $60,000 option

payment. The option agreement provided that the $60,000 payment would be

retained by Park in the event that the sale failed to close prior to the closing date.

The option agreement stated that if the buyer exercises the option, the parties

shall proceed with the transaction according to the terms and conditions set forth

in the PSA. Finally, the option agreement stated that it is “accompanied by a

Lease and Purchase and Sale Agreement between the parties and dated

May 13, 2016.”

   C. Purchase and Sale Agreement

       Under the PSA, which was Exhibit B to the option agreement, Graham

agreed to a purchase price of $1,024,000 for the Property. The parties set

closing for July 1, 2018. Graham agreed to extend $10,000 in earnest money as

a part of the PSA. The PSA stated that “[i]n the event [Park] fails, without legal

excuse, to complete the sale of the Property, then . . . [Graham] may . . .

terminate this Agreement and recover all earnest money or fees paid by

[Graham] whether or not the same are identified as refundable or applicable to

                                          3
No. 79523-6-I/4

the purchase price.” This agreement also contained a feasibility contingency.

The feasibility contingency gave Graham 45 days—the “Feasibility Period”—to

inspect all aspects of the Property and its feasibility for his desired purpose. The

contingency provided that unless Graham gave written notice that the feasibility

contingency was satisfied within 45 days of the mutual acceptance of their

agreements—in this case, 45 days from May 13, 2016—the agreement would

terminate and Graham would receive a refund of his earnest money.

   D. Financing Addendum

       The parties also entered into a Financing Addendum comprising a part of

the PSA. Park had taken out a mortgage with the Bank on April 22, 2016, not

long before the parties executed the May 13, 2016 agreements. The mortgage

contained a due-on-sale clause. Under the Financing Addendum, Graham’s

obligations under the PSA were contingent on his assumption of the mortgage,

with Park remaining liable on the loan. The Financing Addendum stated:
       a. Approval of Documents. [Graham’s] obligations under the
          Agreement are contingent on [Graham’s] assumption of a note
          and mortgage or deed of trust, or a real estate contract. [Park]
          shall deliver to [Graham] within five (5) days after mutual
          acceptance of the Agreement a copy of all documents relating to
          the obligations that [Graham] will assume, including the note,
          deed of trust, mortgage or real estate contract . . . [Graham] shall
          be deemed to have approved the Underlying Loan Documents
          unless [Graham] gives notice of disapproval during the Feasibility
          Period . . .
       b. Consent to Assumption. [Graham] shall submit a complete
          application for assumption of the Underlying Loan Documents
          together with any required application fee no later than five (5)
          days after the end of the Feasibility period. Upon [Graham’s]
          request, [Park] shall assist [Graham] by requesting the lender’s
          consent to the assumption on [Graham’s] behalf . . . Unless
          [Graham] has obtained consent [from the lender] or waived this

                                         4
No. 79523-6-I/5

           condition within [30 days] after the end of the Feasibility Period
           and provided [Graham] has timely complied with [his] obligations
           under this Addendum, this Agreement shall terminate and,
           [Graham] shall receive a refund of the earnest money.

The Financing Addendum also stated that the assumption constituted a portion of

the value of the purchase price of the Property. Graham and his broker, Richard

Nord, later claimed that the assumption would be necessary for the financing for

the redevelopment of the Property. Accordingly, Graham claimed that he would

not have entered into the Transaction without the assumption provision.

   E. First Addendum

       The First Addendum to the PSA provided for Graham to make the $60,000

option payment by the end of the feasibility period, and only upon the execution

of the lease and acceptance of the PSA.

   F. Second Addendum

       After taking possession, Graham claimed the Property had numerous

physical defects. As a part of the Second Addendum—this addendum being

attached to the lease agreement—the parties agreed that the $60,000 option

payment would be disbursed to Park, with some portion of that payment going

directly towards repairs to the Property. While the copies of the Second

Addendum in the record are largely illegible, the Chicago Title ledger shows that

Park received $46,365.34 from Chicago Title.2 It is unclear exactly when the

parties came to an agreement on the Second Addendum, and when the option

       2
           It appears that some portion of the $60,000 payment went back to Graham for
“re-imbursement [sic] for July rents collected by the seller” and for “repair of leaking roof
over . . . restaurant.” (Ellipsis replaces illegible text.) Additionally, some portion of the
$60,000 went to water heater repairs, and another portion went to Mike Welling, Park’s
broker, and Nord.

                                              5
No. 79523-6-I/6

payment was disbursed.3

   G. Failure of the Assumption

       Graham claimed still not to have received the Underlying Loan Documents

identified by the Financing Addendum by December 2016, which had been due

around a half year before.4 Welling put Graham in contact with Park’s son, Park

Juhong; Park Juhong said he would assist Graham in obtaining the Underlying

Loan Documents from the Bank. On January 6, 2017, the Bank told Graham in

an e-mail that they would not release the loan documents to him without Park’s

written permission. On January 10, Graham e-mailed Park Juhong twice, first

requesting “the copy of the mortgage documents and approval letter from [Park],”

and next saying that the “mortgage company will deal with us only when I have

letter signed by your mom and dad.” Park Juhong encouraged Graham to call

the Bank again. Graham claims that he called again, and that the Bank told him

they would not assign or subordinate the loan. On January 14, Park Juhong

emailed Graham, stating: “I was informed that you have talked with the bank

person, Mr. Lee. I understood he gave you [a] sufficient answer. I and my father

need to consider and respect the Bank’s opinion. If there’s anything to help you,

       3
           In his opening brief, Park says Graham signed the Second Addendum on
August 7, 2016. In Graham’s response, he says the parties came to mutual agreement
and executed the addendum on December 7, 2016. In Park’s reply, he says the option
payment was disbursed on December 7, 2016. The Second Addendum is largely
illegible, but it appears Graham signed it on August 7, 2016, and that Park signed it on
December 7, 2016. However, Chicago Title’s records show the company released the
$60,000 payment held in escrow during July and August of 2016.
         4
           It is unclear in the record exactly when Graham received the Underlying Loan
Documents. In Graham’s Response to Park’s Motion for Summary Judgment, he states
that he received them in February 2017.

                                           6
No. 79523-6-I/7

please let us know.” Graham emailed Welling, stating that the Bank

representative told him they were not willing to allow anyone to assume the

mortgage on the Property and that, “according to our contract, the mortgage is

assumable.”5

       Graham claims he then made attempts to obtain alternative modes of

financing to no avail. Graham also sent two letters to Park in 2017 about

securing alternative modes of financing, to which he claims he received no

response. On November 27, 2017, Welling sent another email to Park Juhong,

in which he said that “[t]his entire contract was dependent on [Graham] assuming

the $450,000 loan of your fathers [sic]. They were not able to do that, because

the loan is not assumable.” On December 4, 2017, Nord sent an email to

Welling, asking if Park would be willing to influence the Bank to allow an

assumption; Welling replied that Park would not. Graham, via counsel, then sent

a letter to the Bank, requesting they provide a statement in writing that they

would not allow an assumption of the mortgage, and a statement of whether they

intended to enforce the mortgage’s due-on-sale clause. The record does not

show that Graham received a reply. A declaration from a Bank employee states

that “[a]ny and all successions or assignment of the loan under the Loan

Agreement would have required [the] Bank’s prior written consent.” The record

does not contain any letter of consent from the Bank. A declaration from a Bank

employee also states that the bank has no record of loan applications submitted

       5
       Welling stated in a deposition that he believed the assumption was part of the
agreement between Graham and Park.

                                           7
No. 79523-6-I/8

by Graham.

       On January 16, 2018, Graham sent Park a letter of intent to rescind the

PSA and lease agreement on the basis that he could not assume the mortgage.

The letter stated that if Graham did not receive a refund of his $60,000 option

payment by January 24, 2018, he would sue for rescission. In his reply, Park

stated that while he was “inclined to consider rescinding the [PSA] and Lease,”

he rejected the request to refund the option payment.

   H. Lawsuit

       On March 13, 2018, Graham filed an action against Park seeking

rescission of the parties’ contracts, disgorgement of the $60,000 option payment,

prejudgment interest, and attorney fees.6 On May 14, 2018, Park filed an

answer. On April 19, 2018, Graham moved for summary judgment. The trial

court denied his motion on August 10, 2018.

       On November 8, 2018, Park moved for summary judgment. Graham filed

a cross-motion for summary judgment on November 9, 2018.7 The trial court

granted Graham’s motion and denied Park’s, deciding that, because the Bank

       6
          While Graham’s suit was against the Parks and their marital community, Park
Sang Ho appears to have been the primary individual involved in this transaction.
Accordingly, when referring to Park, we mean only Park Sang Ho. We intend no
disrespect.
        7
          Graham claimed in his second motion for summary judgment that his first was
denied because of “a factual dispute as to whether the request to assume the mortgage
had been denied, and whether (and when) [Park] knew about it.” Nothing else in the
record appears to provide additional clarity about the ruling on his first motion. In
support of his second motion for summary judgment, Graham submitted excerpts of the
transcript from the deposition of Welling, wherein Welling stated that he asked Park, on
Graham’s behalf, if he would be willing to try to influence the Bank to allow an
assumption; Welling further claimed that Park declined to do so. Graham also submitted
emails sent by Welling, wherein Welling stated the “loan is not assumable” and that Park
was not willing to influence the Bank on Graham’s behalf.

                                           8
No. 79523-6-I/9

was unwilling to allow assumption of the mortgage, a material term of the

agreement failed.8 The trial court determined that this conclusion justified

rescission of the Transaction and refund of Graham’s $60,000 payment. Graham

then moved for entry of final judgment, which the trial court granted on January 9,

2019. The trial court also granted Graham’s request for attorney fees and costs

under the PSA.

       Park appeals the trial court’s denial of his summary judgment motion and

the grant of Graham’s summary judgment motion.

                                      II. ANALYSIS

       We review de novo summary judgment rulings. Strauss v. Premera Blue

Cross, 194 Wash. 2d 296, 300, 449 P.3d 640 (2019). “Summary judgment is

appropriate when there is no genuine issue as to any material fact and the

moving party is entitled to a judgment as a matter of law.” Strauss, 194 Wash. 2d at

300 (internal ellipsis, quotation marks and citation omitted); CR 56(c). We must

construe all facts and inferences in favor of the nonmoving party. Scrivener v.

Clark Coll., 181 Wash. 2d 439, 444, 334 P.3d 541 (2014). “A genuine issue of

material fact exists when reasonable minds could differ on the facts controlling

the outcome of the litigation.” Dowler v. Clover Park Sch. Dist. No. 400, 172
Wash. 2d 471, 484, 258 P.3d 676 (2011). Additionally, “[o]n summary judgment

review, we may affirm the trial court’s decision on any basis within the record.”

Davidson Serles & Assocs. v. City of Kirkland, 159 Wash. App. 616, 624, 246 P.3d
8
          The trial court did not specify which of the parties’ agreements had failed, and
treated the agreements as one integrated contract. Park does not argue the trial court
erred in this determination of an integrated document.

                                             9
No. 79523-6-I/10

822 (2011).

       “The purpose of contract interpretation is to determine the parties’ intent.”

Roats v. Blakely Island Maint. Com’n, Inc., 169 Wash. App. 263, 274, 279 P.3d 943

(2012). Washington courts focus on an agreement’s objective manifestations to

ascertain the parties’ intent. Martin v. Smith, 192 Wash. App. 527, 532, 368 P.3d
227 (2016). Martin explains this approach further:
       We impute an intention corresponding to the reasonable meaning of
       the words used. The parties’ subjective intent is irrelevant if we can
       ascertain their intent from the words in the agreement.
          We give words their ordinary, usual, and popular meaning unless
       the entirety of the agreement clearly demonstrates a contrary intent.
       We interpret only what was written in the agreement, not what the
       parties intended to write.
192 Wash. App. at 532 (internal quotation marks and citations omitted).

   A. Park’s Summary Judgment Motion

       Park argues that the trial court improperly denied his summary judgment

motion wherein he requested the court dismiss the claims against him with

prejudice. We disagree.

       1. Waiver by Expiry of the Feasibility Period and Option Payment

       In his summary judgment motion, Park argued that, since the feasibility

period expired, Graham could no longer challenge the Underlying Loan

Documents and assert breach on the basis that he could not assume the

mortgage. Park makes this argument again in his appellate reply brief, but not in

his opening brief. We will not consider arguments raised for the first time in a

reply brief, since the respondent has had no meaningful opportunity to respond.

Cowiche Canyon Conservancy v. Bosley, 118 Wash. 2d 801, 809, 828 P.2d 549

                                         10
No. 79523-6-I/11

(1992). Park also makes a different characterization of this argument elsewhere

in his brief, saying that, because the option payment includes nonrefundable

earnest money, the trial court erred in ordering refund of the option payment.

Under RAP 2.5(a) we may decline to review any claim of error not raised to the

trial court, and decline to do so here.9

       2. Assumption Application

       Park argues that Graham breached the Financing Addendum by not

applying for a mortgage assumption with the Bank, so the court should dismiss

the claims against him with prejudice.

       The Financing Addendum required Graham to apply for an assumption

within five days of the end of the feasibility period. Graham concedes he did not

so apply.

       9
          In any event, both these arguments lack merit. As to the first, Park apparently
did not provide Graham with the Underlying Loan Documents during the feasibility period
as required by the Financing Addendum. As such, it was impossible for Graham to
identify a defect with them during the time period required by the Financing Addendum.
Further, even if he had received the Underlying Loan Documents during this time,
nothing therein shows that the lender would not allow an assumption. Only when
Graham made contact with the Bank could he have learned that they would not allow
assumption of the mortgage. Park’s second argument is more difficult to understand.
He asserts that the $10,000 earnest money payment became nonrefundable at the end
of the feasibility period. Next, he indicates that, since the earnest money payment went
towards the $60,000 option payment, the trial court erred in concluding that he should
repay the option payment, since it includes the $10,000 nonrefundable earnest money
payment. But Park does not identify which portion of any agreement signed by the
parties renders the earnest money payment nonrefundable at the end of the feasibility
period. Contrary to his assertions, the feasibility contingency does not suggest that the
earnest money becomes nonrefundable at the end of the feasibility period, but instead
indicates that it would be refunded to Graham unless he gave written notice to Park that
the feasibility contingency was satisfied. The PSA states that “[i]n the event [Park] fails,
without legal excuse, to complete the sale of the Property, then . . . [Graham] may . . .
terminate this Agreement and recover all earnest money or fees paid by [Graham]
whether or not the same are identified as refundable or applicable to the purchase
price.”

                                            11
No. 79523-6-I/12

      However, Graham argues that, since the Bank would not allow him to

assume the mortgage, he could not apply for the assumption as otherwise

required by the Financing Addendum. Graham claims he first contacted the

Bank about allowing an assumption in December 2016, still before he received

any of the Underlying Loan Documents from Park.10 Graham claims the Bank

told him they would not allow an assumption. Once Graham learned the Bank

would not allow assumption, he made other efforts to contact Park about

alternative financing. Park apparently did not respond. Graham also wrote to the

Bank requesting them to state in writing whether or not they would allow an

assumption. The record does not suggest he received a reply.

      The Financing Addendum also required Park to request that the lender

consent to the assumption on Graham’s behalf. (“Upon [Graham’s] request,

[Park] shall assist [Graham] by requesting the lender’s consent to the assumption

on [Graham’s] behalf.”). An email exchange between Nord and Welling shows

that Park was unwilling to do so.

      The foregoing facts establish that Graham made significant efforts towards

obtaining an assumption of the mortgage, even if he did not apply for an

assumption as required by the Financing Addendum. The foregoing facts also

establish that Park failed to assist Graham in obtaining an assumption of the

mortgage, as the Financing Addendum obliged him to do. The law does not

require someone to do a useless act. Moratti v. Farmers Ins. Co. of Wash., 162

      10
        The Financing Addendum required Park to provide the Underlying Documents
to Graham within five days after mutual acceptance of the PSA.

                                       12
No. 79523-6-I/13

Wn. App. 495, 504–505, 254 P.3d 939 (2011) (citing Willener v. Sweeting, 107
Wash. 2d 388, 395, 730 P.2d 45 (1986); see also Kane v. Borthwick, 50 Wash. 8, 12,

96 P. 516 (1908) (“The maxim that the law does not compel one to do vain or

useless things applies to the case of tender of performance of an obligation.

Hence a tender is not necessary where it appears that, if made, it would have

been fruitless.”). Here, the record, viewed in the light most favorable to Graham,

shows that, even if he had submitted an application for the assumption, the Bank

would have denied it. Thus, Graham had no obligation to apply for the

assumption.

      The trial court properly denied Park’s motion for summary judgment.

   B. Graham’s Summary Judgment Motion

      Graham argued in his summary judgment motion that the trial court should

disgorge the option payment made pursuant to the Option Agreement; he

contended that the parties entered their agreements with the understanding that

Graham would assume Park’s mortgage, but the Bank would not allow

assumption. The trial court granted Graham’s motion and ordered refund of the

$60,000 option payment. Park argues the trial court did so improperly.

      We conclude that a basic understanding of the Transaction became

impossible when the Bank refused to consider assumption, and determine that

rescission of the Transaction and refund of Graham’s $60,000 payment was the

appropriate remedy.

      1. Impossibility

      Park argues that a material issue of fact exists as to whether the Bank

                                        13
No. 79523-6-I/14

would have allowed an assumption, so the trial court improperly determined a

material term of the Transaction failed. Because Graham raised this issue in a

summary judgment motion, we construe all facts and inferences in Park’s favor.

However, we determine that no material issue of fact exists, and conclude that

the trial court properly determined that a material term of the Transaction failed,

since the Bank’s unwillingness to allow the assumption rendered Graham’s

performance impossible.

       The trial court did not identify what grounds justified rescission, except to

say that a material term of the parties’ agreement failed. However, the

assumption of the mortgage constituted a basic understanding of the

Transaction, and its nonoccurrence rendered Graham’s performance

unreasonably difficult.

       The doctrine of impossibility and impracticability of performance

discharges a party from their contractual obligations when a basic understanding

of a contract is destroyed, such destruction makes performance impossible or

impractical, and the party seeking relief does not bear the risk of the unexpected

occurrence. Pub. Util. Dist. No. 1 of Lewis County v. Wash. Pub. Power Supply

Sys., 104 Wash. 2d 353, 363–64, 705 P.2d 1195 (1985). This doctrine excuses

performance upon a showing of extreme or unreasonable difficulty, expense, or

injury, but “[t]he mere fact that a contract becomes more difficult or expensive

than originally anticipated does not justify setting it aside.” Pub. Util. Dist., 104
Wash. 2d at 364. The question of impossibility is typically “one of law rather than

fact, for the court rather than the jury.” Wash. State Hop Producers, Inc.,

                                          14
No. 79523-6-I/15

Liquidation Tr. v. Goschie Farms, Inc., 51 Wash. App. 484, 488–89, 754 P.2d 139

(1988), aff’d, 112 Wash. 2d 694, 773 P.2d 70 (1989) (quoting RESTATEMENT

(SECOND) OF CONTRACTS § 261 (1989)).

       The plain text of the Financing Addendum indicates that the assumption

constituted a basic understanding of the Transaction (“[Graham’s] obligations

under the Agreement are contingent on [Graham’s] assumption of a note and

mortgage or deed of trust, or a real estate contract.”). The assumption explicitly

constituted a portion of the Property’s purchase price. Without the assumption,

Graham would have to endure the unreasonable difficulty of finding alternative

financing and paying the balance of the mortgage to the Bank. Graham’s

obligations are excused under the doctrine of impossibility.

       While the record does not contain a clear, specific statement from the

Bank that they would not allow an assumption, the record is replete with other

uncontested evidence showing just that. On January 17, 2017, Graham emailed

Welling stating that the Bank would not be willing to allow anyone to assume the

mortgage. On November 27, 2017, Welling emailed Park Juhong telling him that

“[t]his entire contract was dependent on them assuming the $450,000 loan of

your fathers [sic]. They were not able to do that, because the loan is not

assumable.” A declaration from a Bank employee states that “[a]ny and all

successions or assignment of the loan under the Loan Agreement would have

required [the] Bank’s prior written consent.” No such written consent appears in

the record. Welling stated in his deposition that he asked Park, on Graham’s

behalf, if he would be willing to try to influence the Bank to allow an assumption;

                                         15
No. 79523-6-I/16

Welling further claimed that Park declined to do so. Park offers no evidence to

counter Graham’s assertion that the Bank would not allow an assumption. Thus,

no genuine issue of material fact exists as to whether the Bank would allow an

assumption. Further, without the assumption, a basic understanding of the

Transaction failed.

       2. Trial Court Remedy

       Park argues that the trial court erred in fashioning its remedy, because it

granted rescission without explaining how the rescission was equitably analyzed

in light of his counterclaims. Park also argues the trial court erred in granting

rescission and refund of the $60,000 option payment because when Graham

made the option payment, he became obligated to purchase the Property.

Finally, Park argues that the option agreement entitles him to keep the option

payment because Graham failed to close by the closing date.11 Graham

disagrees. We conclude that the trial court properly rescinded the contract and

refunded the $60,000 option payment.

       “Contract rescission is an equitable remedy in which the court attempts to

restore the parties to the positions they would have occupied had they not

entered into the contract.” Bloor v. Fritz, 143 Wash. App. 718, 739, 180 P.3d 805

(2008). We review a trial court’s fashioning of equitable remedies for an abuse of

discretion, even on appeal from summary judgment. SAC Downtown Ltd. P’ship

       11
         In addition to these arguments, Park again argues that Graham breached the
Financing Addendum by not applying for an assumption, and that the trial court
improperly refunded Graham the $60,000 payment because it included $10,000 of
nonrefundable earnest money. We address these arguments in Section II.A and do not
address them again here.

                                         16
No. 79523-6-I/17

v. Kahn, 123 Wash. 2d 197, 204, 867 P.2d 605 (1994); see also Borton & Sons, Inc.

v. Burbank Prop., LLC, 9 Wash. App. 2d 599, 612–13, 444 P.3d 1201 (2019)

(Lawrence-Berrey, C.J., concurring in part) (citing Keck v. Collins, 184 Wash. 2d
358, 368, 357 P.3d 1080 (2015)).

       Rescission is an appropriate remedy when performance of a contract

becomes impossible. Hornback v. Wentworth, 132 Wash. App. 504, 511–12, 132
P.3d 778 (2006); see also 25 DAVID K. DEW OLF, KELLER W. ALLEN & DARLENE

BARRIER CARUSO, W ASHINGTON PRACTICE: CONTRACT LAW AND PRACTICE § 11:6, at

357–58 (3d ed. 2014).

       As discussed above, the doctrine of impossibility discharged Graham’s

obligations after the basic understanding that the Bank would consider and allow

the mortgage assumption failed. Accordingly, we conclude that rescission of the

contract and refund of Graham’s option payment is justified. We further conclude

that the trial court did not abuse its discretion in fashioning its remedy, because

by granting a $60,000 repayment, the trial court put Graham in the position he

would have been in had he not entered the Transaction with Park.12

       Park’s arguments to the contrary are unavailing. Park argues that the trial

court erred in granting rescission because it did so without explaining how the

rescission was equitably analyzed in light of his counterclaims. He does not

       12
           According to the Chicago Title ledger, not all of the $60,000 payment went to
Park. However, Graham asserts that the portions were withheld because they went
directly towards making fixes to the Property for which Park was responsible. Park does
not contradict Graham’s claim.

                                          17
No. 79523-6-I/18

support this argument with legal authority or meaningful citations to the record,13

so we decline to consider it. Cowiche, 118 Wash. 2d at 809 (arguments not

supported by legal authority or citation to the record need not be considered).

       Park argues that by making the option payment, Graham became

obligated to purchase the Property, so the court cannot refund him the option

payment. This argument lacks merit, since Graham’s obligations were

contingent on the assumption.

       Park also argues that the option agreement entitles him to keep the option

payment because Graham failed to close. The time is of the essence clause in

the option agreement states that in the event that Graham fails to close through

no fault of Park’s, then the option payment shall be retained by Park. But

Graham failed to close because the Bank would not allow assumption, and

without the possibility of the assumption, the purpose of Graham’s option

payment was defeated. Park’s argument lacks merit.

   C. Attorney Fees

       Park appears to argue that the trial court erroneously granted Graham’s

request for attorney fees and costs. Graham, on appeal, requests an additional

award of fees under RAP 18.1. We affirm the trial court’s award of fees and

grant Graham’s request for fees and costs on appeal.

       1. Trial Court Fees Award

       “A party is entitled to attorney fees on appeal if a contract, statute, or

       13
           Park does cite to the record when making this argument. However, his
citations are to portions of the record that have no bearing on his argument.

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No. 79523-6-I/19

recognized ground of equity permits recovery of attorney fees at trial and the

party is the substantially prevailing party.” Hwang v. McMahill, 103 Wash. App.
945, 954, 15 P.3d 172 (2000). In general, the prevailing party “is one against

whom no affirmative judgment is entered.” Kyle v. Williams, 139 Wash. App. 348,

356, 161 P.3d 1036 (2007) (internal quotation marks and citations omitted).

Whether a party constitutes the “prevailing party” is a mixed question of law and

fact that we review under the error of law standard. Hernandez v. Edmonds

Memory Care, LLC, 10 Wash. App. 2d 869, 874, 450 P.3d 622 (2019). We review

de novo a trial court’s award of attorney fees under contract, and review a

discretionary decision on fees and the reasonableness of the fee award for an

abuse of discretion. Gander v. Yeager, 167 Wash. App. 638, 647, 282 P.3d 1100

(2012).

       The PSA entitled reasonable attorney fees and expenses to the prevailing

party in any suit concerning the agreement. Here, the trial court entered its

attorney fees award under contract and in alternative, on discretionary grounds:
          6. Plaintiff as the prevailing party in its claim is entitled by the
       parties’ agreements to recovery of reasonable attorney fees and
       costs.
          7. In addition and/or in the alternative, [Park’s] motion for
       summary judgment and opposition to [Graham’s] motion for
       summary judgment was not well-grounded in fact; not warranted by
       existing law; and [Park] failed to conduct reasonable inquiry into the
       legal bases for their claims and defenses in bringing their motion for
       summary judgment and opposing that of [Graham’s].

The trial court also awarded Graham his costs incurred in the litigation.

       Park argues that his motion for summary judgment and response to

Graham’s motion was well-grounded in fact and warranted by existing law. Park

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additionally argues that he conducted reasonable inquiry into the legal bases for

his claims. But even accepting these arguments against the discretionary award

of fees, the trial court was justified in imposing attorney fees because the PSA

entitles the prevailing party in a suit to reasonable attorney fees. Since the trial

court properly granted Graham’s summary judgment motion, it properly

determined that Graham prevailed and accordingly granted his request for

attorney fees and costs. Because the PSA allowed for such an award, the trial

court did not err.

       2. Appellate Fees

       Graham seeks an additional award of attorney fees and costs on appeal.

Since we determine the trial court properly granted Graham’s motion, he is the

prevailing party on appeal, and is entitled to attorney fees and costs under the

terms of the contract, subject to his compliance with RAP 18.1.

       Affirm.

 WE CONCUR:

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