Court Opinion

ID: 9546742
Source: CourtListenerOpinion
Date Created: 2023-08-07 17:34:49.703819+00
Date Added: 2024-06-11T15:16:49.258649
License: Public Domain

Callow, J.
(dissenting) — We are asked to enforce a condition subsequent in a deed to property that is presently part of Lake Washington Boulevard. The condition subsequent requires the City either to permit the erection of a boathouse on adjacent shoreland or to return the property. The City agreed to accept the restrictions in this deed when it built the boulevard in order to avoid paying just compensation for the property.
*736The City now wants to avoid performing either of its obligations. It wants something for nothing — because time has passed. It essentially asks this court to sanction its uncompensated taking of the boulevard property. Because it has offered no principled basis to justify its request, I would permit the landowners to assert their rights under the deed. I dissent.
The majority adopts two alternative theories under which it would deny the landowners their rights. First, the majority declares that "[a]s a matter of public policy, a condition subsequent in a deed involving one parcel of land may not place restrictions on another parcel of land." Majority, at 732. However, the majority does not support this broad assertion either by citation to authority or by analysis.
The majority's first alternative holding is inappropriate. The City never raised this issue. The landowners have never had an opportunity to respond to it. We should not rule on it. Transamerica Ins. Group v. United Pac. Ins. Co., 92 Wn.2d 21, 29, 593 P.2d 156 (1979). It is unfair to the plaintiffs and likely to result in bad law. We have wisely avoided such conduct in the past.
The majority's consideration of this theory does not follow from the facts. Neither parcel involved in this case is of marketable size. The City has incorporated one into Lake Washington Boulevard. The State has dedicated the other for use as a public park. These facts simply do not warrant the articulation of a broad new public policy rule intended to protect the free alienability of property.
The majority's first holding is also erroneous. The condition subsequent in the deed to the boulevard property did not place any legal restrictions on the shoreland property. The City could have disposed of the property at any time, had it ever received clear title, without any restriction or encumbrance in favor of the landowners. The landowners simply have never had any legal interest in the shoreland property. Compare Robroy Land Co. v. Prather, 95 Wn.2d 66, 71, 622 P.2d 367 (1980). They have only the right to *737demand that the City either give them an easement interest in the shoreland property or restore them to the status quo before the transfer, by restoring the boulevard property.
Therefore, the majority must mean that public policy precludes this condition because its practical effect is to discourage alienability. However, all conditions subsequent (like all future interests) discourage alienability. "Indirect restraints on alienation arise on the creation of future interests and of trusts." "[T]he very fact that ownership in the thing in question has been divided up into present and future interests may constitute an indirect restraint on alienation." L. Simes & A. Smith, Future Interests §§ 1112, 1113 (2d ed. 1956).
Given this similarity, the majority must justify singling out this condition. How is this condition excessive? How does it interfere with alienability more than any other condition? The majority does not answer these questions. Instead, it avoids them by devoting most of its discussion to an alternative basis for resolving the case.
The majority's second alternative holding states that the "grantor of a power of termination has only a reasonable time after breach within which to declare a forfeiture". Majority, at 732. In order to establish this proposition, the majority determines that the City breached the condition in 1913, by accepting restricted title to the shoreland property from the State. Majority, at 733.
The City did not breach in 1913. Once one party has fully performed its obligations under an agreement the other party cannot anticipatorily breach. 11 S. Williston, Contracts § 1326 (3d ed. 1968); Sethre v. Washington Educ. Ass'n, 22 Wn. App. 666, 672, 591 P.2d 838 (1979). Here, the landowner, by deeding the boulevard property to the City, fully performed its part of its agreement with the City. Therefore, the City did not breach the condition until it was called upon to perform in 1983.
The majority, having "established" that the City breached in 1913, then holds that the landowners have lost *738their right to enforce the condition subsequent. The majority unfairly and upon a false premise states that, thus, the landowners' allegedly inequitable conduct justifies this result.
For example, the majority asserts that the landowners failed to exercise due diligence in determining whether a breach occurred. Majority, at 734. However, the trial court found that the landowners had exercised due diligence. Findings of fact 15-17. This court may not overturn the trial court's determination on this factual issue. Brown v. Voss, 105 Wn.2d 366, 373, 715 P.2d 514 (1986).
The majority dodges this difficulty by asserting that the landowners should have known of the City's breach because the State gave the shoreland to the City by "public law." Majority, at 735. This presumption deserves little weight. First, it has little application to a civil case. "The presumption that people know the law most frequently applies to criminal cases; it is more properly stated that one may not escape criminal liability by claiming ignorance of the law." Hutson v. Wenatchee Fed. Sav. & Loan Ass'n, 22 Wn. App. 91, 98, 588 P.2d 1192 (1978) (refusing to apply presumption in civil case). Second, this is not a "public law." It does not regulate public conduct, but merely conveys title to a particular strip of land.
Finally, the majority asserts that the landowners must have been aware that the new shorelands were being used as a public park because they owned adjacent property. Majority, at 735. However, the City's use of the property as a park is precisely what the parties contemplated:
As Dodge looked out of the window to his home, he saw the park's shoreland extending out beyond the parkway, and had a right to assume the City had fulfilled its promise to acquire the necessary shoreland. He was not put on notice this was land on which he would be forbidden to build a boathouse. The deed was issued in contemplation of parkland, and parkland was being constructed. Dodge had a right to believe that the City was fulfilling its promise.
*739Oral decision of trial judge, at 6, lines 5-15; see also findings of fact 9,17.
The majority's attempt to cast blame on the landowners is unpersuasive. The novelty of the theory on which the majority rests its alternative holding verifies this failure. It is helpful to an understanding of the flaws in the majority to examine why conventional legal and equitable theories do not apply.
For example, the majority does not hold that the City has taken title by adverse possession. Because the City's possession of the boulevard property, even after its breach, was rightful until the landowners elected to reenter, the City's possession was not adverse. Metropolitan Park Dist. v. Rigney, 65 Wn.2d 788, 791-92, 399 P.2d 516 (1965). The landowners have not lost their right by adverse possession.
The majority also does not hold that the landowners have waived their right to reenter the property. Waiver is the intentional and voluntary relinquishment of a known right. PUD 1 v. WPPSS, 104 Wn.2d 353, 365, 705 P.2d 1195, 713 P.2d 1109 (1985). The landowners never actually knew of the City's breach. Findings of fact 15, 16. The landowners have not waived their right.
Nor does the majority hold that the City can estop the landowners from declaring a forfeiture. To assert an estoppel, the City must show that the landowners made an admission, statement or act; that the City acted in reliance thereon; and that the City was injured. McDaniels v. Carlson, 108 Wn.2d 299, 308, 738 P.2d 254 (1987). Here, the City has not relied on or been injured by the passage of time. Finding of fact 19. The City cannot estop the landowners from declaring a forfeiture.
Nor does the majority's decision rest on laches. Laches requires both delay and prejudice to the other party. Shew v. Coon Bay Loafers, Inc., 76 Wn.2d 40, 51, 455 P.2d 359 (1969). The City has not been prejudiced by the passage of time. Finding of fact 19. The landowners have not lost their rights through laches.
*740The majority does not hold (though it seems to silently rely thereon) that the passage of time, by itself, has extinguished the landowners' rights in the boulevard property. The mere passage of time does not extinguish a power of termination. L. Simes & A. Smith, Future Interests § 1238 (2d ed. 1956).
The majority holds, in contrast, that the passage of time has extinguished the landowners' rights in the boulevard property only because the City has breached the condition. The majority embraces this rule because powers of termination "clutter up titles with outmoded restraints, or with factors that have nothing to do with land use", majority at 734, citing Washington State Bar Ass'n, Real Property Deskbook § 6.3 (1979), and because "they involve a potential forfeiture of the transferred interest." Majority, at 734.
These factors might justify the adoption of a rule which limits the effective duration of all conditions subsequent. Their exemption from the rule against perpetuities appears to be the result of mere historical accident. L. Simes & A. Smith, Future Interests § 1238 (2d ed. 1956) ("No very satisfactory reason is suggested in the cases.''). Indeed, this court has adopted similar limitations in related areas of property law.
For example, rights of first refusal are often cast in the form of conditions subsequent. L. Simes & A. Smith, Future Interests § 1154 (2d ed. 1956). We recently held that the holder of a right of first refusal can only exercise the right for a reasonable time after its creation. Robroy Land Co. v. Prather, 95 Wn.2d 66, 622 P.2d 367 (1980).
Restrictive covenants may also effectuate the same purposes as conditions subsequent. L. Simes & A. Smith, Future Interests § 1991 (2d ed. 1956). Under the doctrine of changed conditions, a court will not enforce a covenant if the character of the neighborhood has so changed as to make it outmoded. Stoebuck, Running Covenants: An Analytical Primer, 52 Wash. L. Rev. 861, 883-85 (1977) (in *741this area of the city there has been little change over the decades). Also, under the doctrine of comparative hardship, a court will not enforce a covenant if it would "deprive the defendant of the really beneficial use of his land without materially benefiting the plaintiff." 1 Washington State Bar Ass'n, Real Property Deskbook § 17.22 (1986). It may be that this court should similarly limit the effective duration of conditions subsequent. However, the City did not raise these issues in this case.
The considerations the majority opinion articulates do not support the rule it applies. Conditions subsequent potentially clutter up titles and involve forfeitures whether they have been breached or not. See 1 Washington State Bar Ass'n, Real Property Deskbook §§ 6.2, 6.3 (1986). These effects remain the same whether the breach occurred in 1913, or in 1983, or not at all. The majority's rule applies only if there has been a breach.
I submit this result is wrong, that all conditions subsequent should be treated alike and relief should not be conditioned upon an irrelevant fortuity.
For the above reasons, I would grant the landowners a remedy. I would also hold that the trial court erred in awarding damages based on the value of the unpermitted boathouse. The proper remedy for breach of a condition subsequent is reentry to the land granted. Mills v. Seattle & M. Ry., 10 Wash. 520, 39 P. 246 (1895). See also Ross v. Harding, 64 Wn.2d 231, 391 P.2d 526 (1964). The landowners became entitled to possession of the boulevard property in 1983, when they exercised their power of termination. The landowners are entitled to compensation for their loss, in 1983, of their rights to this parcel. Highline Sch. Dist. 401 v. Port of Seattle, 87 Wn.2d 6, 548 P.2d 1085 (1976). Damages should be figured as the difference between the fair market value of the entire tract, including the boulevard property, and the fair market value of the remainder. State v. McDonald, 98 Wn.2d 521, 526, 656 P.2d 1043 *742(1983). I would remand to the trial court to have damages redetermined accordingly.
Durham, J., concurs with Callow, J.