Court Opinion

ID: 1041050
Source: CourtListenerOpinion
Date Created: 2013-09-17 22:06:17.668328+00
Date Added: 2024-06-11T13:10:04.114739
License: Public Domain

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                                                                                                     4
    IN THE COURT OF APPEALS OF THE STATE OF WASHING
                                                                                         BY
                                         DIVISION II
                                                                                                   Pu
                                                                                                           r

OAKRIDGE HOMES II,LTD., Washington
                      a                                             No. 43030 4 II
                                                                              - -

corporation,

                               Appellant,                     UNPUBLISHED OPINION

       V.

     CITIZENS
FIRST-                  BANK &           TRUST
COMPANY,        a    North   Carolina    banking
association,

       BJORGEN, J. —Oakridge Homes II,Ltd. sued First -
                                                      Citizens Bank and Trust Company for

specific performance or damages after a real estate transaction between the two parties failed to

close. The deal failed after First-
                                  Citizens, the prospective seller, refused responsibility for school

district impact mitigation fees associated with 19 undeveloped parcels involved in the

transaction. Oakridge moved for partial summary judgment, requesting a determination that

First -
      Citizens bore responsibility for the impact fees. First -Citizens filed a cross motion for

summary judgment, requesting dismissal of the lawsuit. The trial court denied Oakridge's

motion and granted First-
                        Citizens' motion on the ground that the lack of an adequate legal

description in the purchase and sale agreement rendered the contract void under the statute of

frauds. Holding that the agreement contained an adequate legal description, we reverse and

remand for further   proceedings.
No. 43030 4 II
          - -

                                              FACTS

       In September 2009, First -Citizens purchased a majority of the assets ofVenture Bank's

assets from the Federal Deposit Insurance Corporation. These assets included a promissory note

secured in part by the unimproved lots at issue here: lot 22 and lots 28 through 45 of the Silver

Creek Phase III plat in Puyallup. First -Citizens foreclosed and purchased the Silver Creek lots at

a trustee's sale on September 18,2009.

        On February 24,2011, Oakridge,through a real estate agent, transmitted a purchase offer

in the form of a document titled " acant Land Purchase and Sale Agreement,"
                                 V                                        consisting of

several preprinted Northwest Multiple Listings Service forms with attachments. Oakridge's

transmission included'a page with the full legal description ofthe Silver Creek lots at issue here.

Oakridge's president, Scott Serven, had signed the forms and attachments.

        On March 2,2011,First -Citizens sent Oakridge a counteroffer. The counteroffer

consisted of the same preprinted forms signed by Serven, a cover page titled " ounteroffer
                                                                             C

Addendum to Real Estate Purchase and Sale Agreement, " a page labeled " xhibit C"
                                                   and                E

containing a list of the Silver Creek lots with various data, including street addresses and tax

parcel numbers. Clerk's Papers (CP)at.23 55.
                                     2 -

        First-
             Citizens' March 2 transmission did not include the page with the legal description

of the Silver Creek lots. The counteroffer addendum stated, however, that First -Citizens

accepted all the terms of Oakridge's February 24 purchase and sale agreement except for 10

specified changes. Handwritten modifications corresponding to these changes appear in the

preprinted formsthe same forms Serven had signed on February 24. None of the changes

relates to the legal description of the Silver Creek lots.

                                                  0)
No. 43030 4 II
          - -

       Serven signed and returned the counteroffer addendum and the transaction proceeded to

escrow. The escrow agent found that the Silver Creek lots were subject to school district impact

mitigation fees of 3, per lot. At closing on the first 10 Silver Creek lots, the escrow agent
                   $ 005

credited the amount of the impact fees to Oakridge, deducting it from the money due to First-

Citizens.

       On April 14, 2011, First -Citizens' Vice President Dawn Gadwa signed the closing

documents, including a bargain and sale deed that included the full legal description of the Silver

Creek lots. She made handwritten changes to the settlement statement, however, subtracting the

mitigation fees from the amount credited to Oakridge. Gadwa also added an addendum to the

agreement, purporting to modify one of the terms so as to assign to Oakridge rather than First-

Citizens responsibility for charges and assessments due after closing. Oakridge rejected

Gadwa's attempt at modification and the deal failed to close.

       Oakridge sued First -
                           Citizens on May 12, 2011, requesting specific performance or

damages, plus costs and attorney fees under the agreement. First -Citizens answered on June 15,

raising various defenses including failure to state a claim, contractual waiver, and noncompliance

with the statute of frauds. On June 24, Oakridge filed a declaration by Serven, dated June 15,

2011, that purported to include as an attachment a copy of the original purchase and sale
                                                           "

agreement together with the counter offer from"First -Citizens. CP at 5. However, the
                                    -

attachment consisted only of the March 2 transmission from First -Citizens to Oakridge, which

did not include the legal description of the Silver Creek lots.

       Oakridge moved for partial summary judgment, requesting a determination that First-

Citizens   was   responsible   for the school   impact   fees. In response, First -Citizens   argued, among
No. 43030 4 II
          - -

other things,that the agreement did not include a full legal description of the parcels and was

therefore void under the statute of frauds. First -
                                                  Citizens then filed a cross motion for summary

judgment based on the defenses it had asserted. In support of its argument that the agreement

was void under the statute of frauds,First-
                                          Citizens pointed out that the copy of the agreement

provided with Serven's own declaration did not include the legal description.

       The court denied Oakridge's motion and granted First-
                                                           Citizens' motion on the grounds

that the agreement lacked an adequate legal description, making it void under the statute of

frauds. The court then denied Oakridge's motion for reconsideration and granted First -Citizens'

request for attorney fees. Oakridge timely appeals.

                                             ANALYSIS

        Oakridge contends that the trial court erred by granting summary judgment to First-

Citizens based on the agreement's noncompliance with the statute of frauds. We agree, and

therefore reverse the grant of summary judgment to First-
                                                        Citizens and remand to the trial court

for further proceedings consistent with this opinion. We decline to reach, on the record before

us,the other claims raised by the parties,leaving it to the trial court to resolve those issues in the

first instance.

                                                   0
No. 43030 4 II
          - -

                                     I. STANDARD OF REVIEW

       We review a grant or denial of summary judgment de novo and perform the same inquiry

as the trial court. Macias v. Saberhagen Holdings, Inc., Wn. d 402, 407 08,282 P. d 1069
                                                       175 2            -       3

2012);
     Torgerson v. One Lincoln Tower, LLC, 166 Wn. d 510, 517, 210 P. d 318 (2009).
                                                2                  3             A

parry moving for summary judgment bears the burden of demonstrating that no genuine issue of

material fact remains. Atherton Condo. Apartment Owners Ass'n Bd. ofDir. v. Blume Dev. Co.,

115 Wn. d 506, 516, 799 P. d 250 (1990).If the moving party satisfies its burden, the
      2                  2

nonmoving party must present evidence that demonstrates that a material fact is in dispute.

Atherton, 115 Wn. d at 516.
                2

       Court rules provide for summary judgment where " he pleadings, depositions, answers to
                                                      t

interrogatories, and admissions on file,together with the affidavits, if any, show that there is no

genuine issue as to any material fact and that the moving party is entitled to a judgment as a

matter of law." 56( ). material fact is one on which the outcome ofthe litigation
              CR c A "

depends in whole or in part."
                            Atherton, 115 Wn. d at 516 (citing Morris v. McNicol, 82 Wn. d
                                            2                                          2

491,494, 519 P. d 7 (1974)). court should grant summary judgment only if reasonable
              2           A

persons could reach but one conclusion from all the evidence. Vallandigham v. Clover Park Sch.
Dist. No.400, 54 Wn. d 16, 26, 109 P. d 805 (2005).In reviewing a summary judgment, we
         - 1       2                3

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

nonmoving party. Vallandigham, 154 Wn. d at 26;Atherton, 115 Wn. d at 516.
                                     2                         2

        Because the court below decided this case on cross motions for summary judgment, we

review the entire matter de novo. In reviewing the trial court's judgment in favor of First -

Citizens, we view the evidence in the light most favorable to Oakridge.

                                                  5
No.43030 4 II
         - -

                                         II. STATUTE OF FRAUDS

          Oakridge assigns error to the trial court's ruling that the lack of a full legal description

rendered the agreement void under the statute of frauds. Oakridge argues that the agreement

satisfied the requirements of the statute on three independent grounds: (1) agreement
                                                                          the

incorporated the full legal description by reference; 2) information contained in First-
                                                      ( the

Citizens' counteroffer alone identified the exact location and extent of the Silver Creek lots

without recourse to parol testimony; and (3) subsequent signing of a deed by First-
                                           the                                    Citizens,

containing the full legal description,removed any potential uncertainty as to the identity of the

Silver Creek lots.'Because we hold the requirements of the statute of frauds satisfied both by

incorporation of the legal description and by the identifying information appearing in First-

Citizens' counteroffer, we do not address the parties' other arguments concerning the statute of

frauds.

          Washington's statute of frauds mandates that "[ very conveyance of real estate, or any
                                                       e]

interest therein, and every contract creating or evidencing any encumbrance upon real estate,

shall be by deed."RCW 64. 4. Our courts have long held that this requires " description
                      010.
                        0                                                 a

of the land sufficiently definite to locate it without recourse to oral testimony"or " reference to
                                                                                     a

another instrument which does contain a sufficient description."Bigelow v. Mood, 56 Wn2d

340, 341, 353 P. d 429 ( 960)citing Bingham v. Sherfey, 38 Wn. d 886, 34 P. d 489 ( 951)).
               2       1      (                              2      2     2       1

Washington adheres to this rule more strictly than perhaps any other state. 18 WILLIAM B.

 Oakridge also argues that we should not invalidate the agreement under the statute of frauds
because doing so would enable the perpetration of a fraud, citing Miller v. McCamish, 78 Wn. d
                                                                                             2
821, 479 P. d 919 (1971).That case, however, involved part performance of an oral contract.
           2
Oakridge does not discuss the elements of fraud or explain how First -Citizens' conduct amounts
to fraud.
No.43030 4 II
         - -

STOEBUCK & JOHN-
               W.WEAVER, WASHINGTON PRACTICE: REAL ESTATE: TRANSACTIONS § 16. ,
                                                                            3

at 225 (2d ed. 2004).Our Supreme Court upheld the rule against a direct challenge 14 years ago

in Key Design Inc. v. Moser, 138 Wn. d 875, 881, 884, 983 P. d 653 (1999).
                                   2                       2

       Incorporation of the Legal Description by Reference

       Oakridge first argues that the agreement satisfied the statute of frauds because it

incorporated the full legal description by reference. Because the parties here clearly and

unequivocally expressed their intent to incorporate the page containing the full legal description

into the agreement, we hold that the agreement met the requirements of the statute.
                                 -

       It is settled law in   Washington that "` [ f the parties to a contract clearly and
                                                 i]

unequivocally incorporate by reference into their contract some other document,that document
becomes part of their contract. "'        Wash. State Major League Baseball Stadium Pub. Facilities

Dist. v. Huber, Hunt &     Nichols-
                                  Kiewit Constr. Co., Wn. d 502, 517, 296 P. d 821 (2013)
                                                    176 2                  3

quoting Satomi Owners Assn v. Satomi, LLC, 167 Wn. d 781, 801,225 P. d 213 (2009)).
                                                 2                 3             The

statute of frauds does not require that a single document contain all the required terms,provided

that some collection of writings contains the necessary information and "`
                                                                        the writings are so

connected   by internal   reference ...    that they may be said to constitute one paper relating to the

contract. "'   Knight v.Am. Nat'l Bank, 52 Wn. App. 1,5,756 P. d 757 (1988)quoting Grant v.
                                                             2              (

Auvil, 39 Wn. d 722, 724 25,238 P. d 393 (1951)). parties need not physically attach a
            2            -       2             The

document to the contract to incorporate it by reference. W. Wash. Corp. of Seventh Day
                                                                                   -

Adventists v. Ferrellgas, Inc., Wn.App. 488, 498 99,7 P. d 861 (2000).
                              102                -     3

        Here,the preprinted forms which were part of Oakridge's February 24 purchase offer

contained a space for the legal description in which the preparer wrote " ttached as Exhibit A."
                                                                        A

                                                        7
No. 43030 4 II
          - -

CP at 224. No attachment to the forms in the record is marked " xhibit A," no Exhibit A
                                                              E          and

appears in the list of addenda. However,the full legal description of the Silver Creek lots

appeared as the first attachment following the preprinted forms,immediately preceding the

attachment labeled " xhibit B," bore the signatures of both Serven and Gadwa. CP at 232-
                   E          and

35. Thus,the February 24 agreement contained the full legal description of the properties at

issue.

    I-
         The Counteroffer Addendum by First -Citizens directly refers to the February 24 purchase

and sale agreement, explicitly incorporating all of its terms and conditions except those

inconsistent with the 10 items set forth in the addendum. The subject matter of the transaction

plainly qualifies as a " erm"of the agreement. Knight, 52 Wn. App. at 4. None ofthe 10 items
                       t

in the counteroffer addendum relate to the legal description of the properties.

         First-
              Citizens does not actually dispute that Oakridge's agent supplied this legal

description with the initial offer. Instead, First-
                                                  Citizens contends there is no dispute that the

legal description was not part of the agreement because Serven's declaration of June 15,2011

purported to describe the agreement yet only contained First- itizens' March 2 counteroffer,
                                                            C

which did not include the legal description. This contention begs the question, however,

2
  The references in these documents distinguish this case from Home Realty Lynnwood, Inc. v.
Walsh, 146 Wn. App. 231, 189 P. d 253 (2008), which Division One of this court held an
                                     3             in
earnest money agreement void for lack of a legal description despite testimony that the real
estate agent's file contained an adequate description. In that case, the parties did not present the
file to the trial court and the agreement did not explicitly refer to the description, so the only
evidence properly before the trial court connecting the agreement with the legal description
consisted of parol testimony. Walsh, 146 Wn. App. at 238 39.
                                                         -
3
    Although a counteroffer " rdinarily rejects and terminates the original offer," s Law
                            o                                                     Black'
Dictionary 403 (9th ed. 2009),
                             such is not the case here because First -Citizens' March 2 response
explicitly accepts   the terms of Oak-idge' February 24 offer.
                                  s  r
No.43030 4 II
         - -

because, as just shown, First -
                              Citizens' counteroffer plainly incorporated the terms of Oakridge's

February 24 offer, including the legal description. The absence ofthe page with the legal

description in First -
                     Citizens' counteroffer,therefore, was of no moment. Further, Oakridge

provided the trial court with copies of both its initial offer and First -
                                                                         Citizens' counteroffer, along

with a declaration from the agent that explained why Serven's declaration had described the

attachment as it did. Thus Serven's declaration is not an admission that the contract did not

include a legal description.

        The March 2 counteroffer clearly incorporated.the terms of the February 24 purchase and

sale agreement, which in turn incorporated the full legal description. The fact that the page

containing the description was not labeled " xhibit A" irrelevant. The agreement referred to
                                           E         is

an attachment containing the legal description, and the description is found between the last page

of the preprinted forms and the attachment labeled " xhibit B,"
                                                   E          exactly where one would expect.

Courts do not permit " reative lawyers"to use typographical errors in a contract " o obscure the
                     c                                                           t

clear intentions of the parties."Sackman Orchards v. Mountain View Orchards, 56 Wn.App.

705, 706 07,784 P. d 1308 (1990)citing Schauerman v. Haag, 68 Wn. d 868, 873, 416 P. d
         -       2               (                              2                  2

88 (1966)).

        The language used by the parties here clearly and unequivocally expressed their intent to

incorporate the page containing the full legal description into the agreement. We therefore hold

that the trial court erred in granting summary judgment to First -
                                                                 Citizens based on lack of a legal

description.

2.      Sufficiency of Other Information Contained in the Agreement

                                                   9
No. 43030 4 II
          - -

        Oakridge further argues that,even if the agreement did not incorporate by reference the

legal description of the Silver Creek lots,other information included in First -Citizens' March 2

counteroffer, such as the tax parcel numbers, lot numbers, plat name, and county, state and zip

code, satisfy the requirements of the statute of frauds. Because a person of average intelligence

could identify the exact location and extent of the Silver Creek lots at issue from judicially

cognizable public records, without recourse to oral testimony,based only on the information in

First -
      Citizens' counteroffer, we hold as an alternative ground for reversal that this information

also satisfies the requirements of the statute of frauds.

        First-
             Citizens directs our attention to Martin v. Seigel, 35 Wn. d 223,229;212 P. d 107
                                                                      2                2

1949),
     where our Supreme Court specified that a "conveyance ofplatted real property must
contain ...   the correct lot number(s), number, addition, city,county, and state."Although
                                      block

our Supreme Court continues to cite Martin for that proposition,the Court long ago recognized

that it had relaxed this position somewhat. Compare Tenco, Inc. v. Manning, 59 Wn. d 479,
                                                                                 2

484 85,368 P. d 372 (1962)noting that " artin v. Seigel has since been qualified to a certain
    -       2              (          M

extent"and citing cases) with Pardee v. Jolly, 163 Wn. d 558, 567, 182 P. d 967 (2008)citing
                                                     2                  3              (

Martin for the proposition that " contract for the sale or conveyance ofplatted real property
                                a

must include a description ofthe property with the correct lot number, block number, addition,

city, county, and state. ").

        Notably,just two years after it decided Martin, our Supreme Court held that a county

assessor's tax parcel number,when combined with the otherwise insufficient information in a

defective legal description, satisfied the statute of frauds because it would lead an interested

party to the full legal description in the county records. Bingham, 38 Wn. d at 889 (noting that
                                                                         2

                                                  10
No.43030 4 II
         - -

t] is certain which
 hat                    can   be made certain. "). The   Bingham Court went even further, supplying

the omitted directional reference for a meridian, based on the fact that it could only be east or

west, and west would place the property in the Pacific Ocean. Bingham, 38 Wn. d at 887. In
                                                                            2

another case decided that year, Lofberg v. Viles, 39 Wn. d 493, 496 97,236 P. d 768 (1951),
                                                       2            -       2             our

Supreme Court upheld the trial court's decision to reform a defective description of platted

property by taking judicial notice ofthe fact that " hehalis is in Lewis county, state of]
                                                   C                     ,       [

Washington."Similarly, 10 years later, our Supreme Court held that an instrument conveying an
easement satisfied the statute because the precise location could " e located by reference to the
                                                                  b

government monuments"identified on an attached blueprint. City ofSeattle v. Nazarenus, 60

Wn. d 657, 661, 374 P. d 1014 (1962).Considering that some of the details mentioned in
  2                  2

Martin,notably block numbers, do not appear in many plats, including the one at issue here, we

cannot take literally the language cited from Martin.

        The Martin Court described the purpose of the strict rule it announced as "to require

people dealing with real estate to properly and adequately describe it,so that courts may not be

compelled to resort to extrinsic evidence in order to find out what was in [their]minds" Martin,

35 Wn. d at 228. In reaffirming the rule,the Key Design Court pointed out that the
     2

requirements of the statute for land contracts helps [sic]to create a climate in which parties .

often regard their agreements as tentative until there is a signed writing,"
                                                                           noting that the parry

against whom enforcement was sought in that case claimed exactly that,that the negotiations
were still ongoing. Key Design, 138 Wn. d at 887. Such is not the case here. The transaction
                                      2

proceeded to escrow, and First -Citizens' representative signed both a copy of the legal

                                                  11
No.43030 4 II
         - -

description and a deed containing the legal description, demonstrating that the parties intended to

enter into a binding agreement concerning property readily identifiable by a court.

       I] requested by a party and supplied with the necessary information," court must take
        f                                                                  a

judicial notice of facts " apable of accurate and ready determination by resort to sources whose
                         c

accuracy cannot reasonably be questioned."ER 201. Judicially noticeable facts include matters

of public record, such as the system of land surveying and recording used in the United States.

Bingham; 38 Wn. d at 887. Oakridge correctly states that a person of average intelligence could
              2

obtain all the information required by Martin from judicially cognizable public records, without

recourse to oral testimony,just from the information in First -Citizens' March 2 counteroffer.

       First -Citizens correctly states that no Washington case has held that the tax parcel

number alone satisfies the statute of frauds. Here, however, the plat name, lot numbers, county,

state, zip code, and street addresses also appear in the counteroffer. We conclude that this
information suffices under the rule expressed in Bigelow, 56 Wn. d at 341, and hold, also on this
                                                               2

alternative ground,that the trial court erred in granting summary judgment to First -Citizens

based on lack of a legal description.

4
  In a case decided the year before Martin, our Supreme Court held tax lot numbers,together
with descriptions of the " eneral locality"of the properties, sufficient for purposes of a tax
                         g
foreclosure sale. City ofCentralia v. Miller, 31 Wn. d 417,427 29, 197 P. d 244 (1948).
                                                     2             -           2

                                                 12
No. 43030 4 II
          - -

                                  III. COSTS AND ATTORNEY FEES

         The terms of the purchase and sale agreement entitle the prevailing party in a dispute

concerning the agreement to reasonable attorney fees and expenses. The trial court awarded

70
23, 69.in costs and fees to First -Citizens after it granted First -
  3                                                                Citizens' summary judgment

motion. As the result of our holdings here,it cannot be said at this point that First -Citizens

prevailed at trial. Therefore, we vacate the trial court's award of costs and fees to First -
                                                                                            Citizens.

In determining the prevailing party on remand for purposes of attorney fees, the trial court shall

take Oakridge's prevailing in this appeal into consideration. Once the prevailing party is

determined on remand, it may request the trial court to award attorney fees on any appropriate
basis.

         Both Oakridge and First -Citizens request costs and attorney fees on appeal. "
                                                                                      A

contractual provision for an award of attorney fees at trial supports an award of attorney fees on

appeal:"Reeves v. McClain, 56 Wn.App. 301, 311, 783 P. d 606 (1989).However, because we
                                                     2

remand for further proceedings,the prevailing parry remains to be decided, and neither parry is

yet entitled to costs or fees. If Oakridge prevails on remand, it will be entitled to the reasonable

costs and fees it incurred in this appeal. See Stieneke v. Russi, 145 Wn.App. 544, 572, 190 P. d
                                                                                             3

60 (2008).

                                          IV. CONCLUSION

         Because we hold that the purchase and sale agreement incorporated the legal description

by reference and that other information in the agreement also satisfied the requirements of the

statute of frauds, we vacate the trial court's summary judgment and attorney fee award in favor

                                                  13
No.43030 4 II
         - -

of First -Citizens. We decline to reach the other issues raised in this appeal, however, and

remand for further proceedings consistent with this opinion.

       A majority of the panel having determined that this opinion will not be printed in the

Washington Appellate Reports,but will be filed for public record in accordance with RCW

040,
2.6. is so ordered.
 0 it

                                                   B     G

We concur:

                                                 14