Court Opinion

ID: 2790010
Source: CourtListenerOpinion
Date Created: 2015-03-30 19:11:42.359326+00
Date Added: 2024-06-11T11:28:52.735447
License: Public Domain

IN THE COURT OF APPEALS FOR THE STATE OF WASHINGTON

LESLIE BLAKEY SPENCER, an
individual, and TAMMY S. BLAKEY,           )      No. 71036-2-1
an individual
                                                                                          o
                                                                                         c/>o
                     Appellants,           )      DIVISION ONE                           —4c:
                                                                                  en

                                                                                  CO
                                                                                  o
NANCY BLAKEY, personal                                                                    j»-orn

representative of THE ESTATE OF                                                   5       ^5°
GREGORY B. BLAKEY, an individual                                                   • •
                                                                                          —ia
and GLENDA BLAKEY, an individual           )      UNPUBLISHED OPINION

                     Respondents.          )      FILED: March 30. 2015

       Spearman, C.J. — This appeal arises from a dispute over the

management and sale of a commercial property, owned in equal parts by four
siblings pursuant to a written co-tenancy agreement. The appellants challenge

the trial court's summary judgment order dismissing their claim for specific

performance ofthe default provision ofthe Agreement and granting specific
performance of a provision authorizing sale to a third party absent agreement

between the co-tenants. They also challenge the trial court's order finding that

they failed to match a third party buyer's purchase offer and authorizing the sale
of the property over their objection. Finally, they challenge the trial court's
summary judgment dismissal of their breach of contract, bad faith, gross

negligence, and breach of fiduciary duty claims. We affirm.
No. 71036-2-1/2

                                            FACTS

        In 1993, Bruce Blakey, gifted his children, Gregory, Glenda, Leslie and

Tammy,1 equal ownership interests in a parcel of commercial property in Seattle,

Washington. The property is a 1.33 acre parcel, which contains an empty 24,000

square foot warehouse and a large gravel parking area with room for 65 cars.

The siblings took ownership of the property pursuant to a fully integrated, written

co-tenancy agreement (Agreement), drafted by Bruce's attorney and signed by

each sibling.

       The Agreement contained various provisions that governed the

management of the property. Paragraph 19 of the Agreement set forth the

general requirement that the sale or leasing of the property must be approved by

tenants owning more than fifty percent of the total undivided interests in the

property. Paragraphs 12 and 13 provided exceptions to this general requirement

in the event of default, material breach of contract, or deadlock between the

tenants. Paragraph 6 provided for a "managing tenant" who would be elected

"from time to time" by tenants owning more than fifty percent of the total

undivided interests. (Clerk's Papers (CP) at 176. Paragraph 7 defined the scope

of the managing tenant's authority as follows:

        complete, absolute and exclusive power and authority to manage
        the business and affairs of the Tenancy, to perform the
        administrative and ministerial functions of the Tenancy, and do any
        and all other acts ... necessary or convenient to accomplish the
        purposes and carry on the business and affairs of the Tenancy,
        provided, however, that the Managing Tenant shall not have the

        1The parties are referred to by their first names for clarity. Gregory passed away while
this appeal was pending. His estate is represented on appeal by Nancy Blakey.
No. 71036-2-1/3

       power or authority to sell, lease, encumber, develop, improve,
       transfer or dispose of or enter into any agreement for the sale,
       leasing, encumbrance, development, improvement, transfer or
       disposition of the Property.

CP at 176-177. This provision also granted the managing tenant power of

attorney over the Tenancy (Tenancy) and the property.

       The Agreement expressly provided that Gregory would serve as the first

managing tenant and it is undisputed that he retained that position until at least
June 2007. The parties disagree as to who held the position after that date.

Gregory and Glenda contend that Leslie assumed the duties of managing tenant
in June or July 2007 when she took possession ofthe books and records of the
Tenancy, closed the Tenancy's bank account for which Gregory was signatory,
and opened a new Tenancy account with herself and Glenda as signatories.2
They contend that thereafter Leslie managed the administrative and ministerial
affairs ofthe Tenancy and held herself out to third parties as the managing
tenant, until the fall of 2009 when Leslie deposited a box containing the books
and records of the Tenancy at Glenda's place of employment and ceased

fulfilling those duties.

        During his tenure as managing tenant, Gregory was at all times the
majority shareholder and president of Snopac, a crab and fish processing
company founded by his father. From 1993 until February 2008, Snopac, without
benefit of a written lease, occupied the entire property and paid the Tenancy

$12,500 per month. Initially, Leslie, Tammy, and Glenda each held minority

        2It is undisputed that no formal election replacing Gregory as managing tenant ever
occurred.
No. 71036-2-1/4

interests in Snopac and consented to the company's occupation of the property.

However, beginning in 2006 disputes arose between the siblings regarding the

operation of Snopac, with resulting litigation. Gregory initiated a lawsuit in 2008

to redeem his sisters' minority interests in Snopac, which resulted in him buying

out his sisters' interests in the company.3 In February 2008, Gregory caused

Snopac to vacate the property, leaving it unoccupied.

       In March 2008, Leslie and Tammy proposed trying to lease the property.

The parties exchanged several emails on this subject, in which Gregory and

Glenda objected to leasing the property in its existing state. Both claimed that

damage to the property from the 2001 Nisqually earthquake had rendered the

building unsafe and subjected them to potential liability should a third party lease

the building. Glenda refused to lease the property unless full disclosure of the

damage was made. Gregory refused to lease unless the other tenants provided

an indemnification for damages related to the building's deficiencies. Instead,

Gregory and Glenda both expressed interest in selling the building to a third party

"as is." CP at 1133, 1155. Glenda also offered to sell her ownership interest to

Tammy for $600,000. Following this exchange of emails, the property remained

vacant for 18 months.

        In September 2009 Gregory began storing some old Snopac equipment in

the unoccupied warehouse. His sons, Dan and Ben, also stored a van and nets

in the warehouse. And the tenants' father, Bruce, stored some personal furniture

         3This court heard Leslie and Tammy's appeal, in which the principle issue was the value
of the sisters' shares in the company. Snopac Products v. Spencer, 169 Wn. App. 1010(2010)
(unpublished).
No. 71036-2-1/5

there. The parties disagree on the exact amount of square footage occupied by

Snopac during this time, but it is undisputed that it did not utilize the entire

warehouse space.

        Snopac paid $40,234.60 in property taxes, utilities and related expenses

for the property during the time it used the warehouse as storage, which

amounted to $2,117.61 per month. It recouped some of this expense by

arranging for another company, Double E Foods, to use approximately 2,500

square feet of the property as storage space in return for $1,000 per month.

Gregory and Glenda also allowed another company, Manson Construction

Company, to park approximately 15 cars on a portion of the property during this

time. Double E Foods and Manson used the property pursuant to written

agreements, which Leslie and Tammy did not authorize.

        On May 10, 2011, Gregory sent an email to Leslie and Tammy in which he

reiterated his willingness to lease the property ifthe other tenants agreed to

indemnify him against any damage claims arising from the unsafe condition of

the warehouse. This email also advised Leslie and Tammy that Gregory and

Glenda were soliciting offers to purchase the property "as is" and that upon

receipt of such an offer, Leslie and Tammy would have the right to buy out

Gregory and Glenda's ownership interests pursuant to the Agreement. The email

further advised that ongoing attempts to lease the property might inhibit efforts to

sell.

        Two days later, Leslie and Tammy sent Gregory a letter entitled "60 Day

Notice of Cure Breach of East Marginal Way Tenants in Common Co-Tenancy
No. 71036-2-1/6

Agreement," in which they claimed that Snopac was "leasing and subleasing the

property" without their permission and in violation of the co-tenancy Agreement.

CP at 1137. They alleged that Gregory had denied Leslie and Tammy's repeated

requests to lease or sell the property in order to gain a personal benefit, i.e., a

below market-rate lease and income-generating subleases for his company,

Snopac, to the detriment of the other tenants. The letter demanded alleged back

rent in the amount of $198,587.43 for Snopac's use of the property since

September 2009.

       In response to the notice, Snopac removed all of its equipment from the

warehouse, but it did not pay the claimed damages. Snopac also ceased paying

the property's taxes and utility expenses. It also appears undisputed that Double

E Foods and Manson vacated the property within 60 days of the Notice of Cure,

                                 Procedural History

       Leslie and Tammy filed this action against Gregory and Glenda in

September 2011, alleging breach of contract and unjust enrichment. They sought

damages, attorney's fees, an apportionment of the alleged unjust enrichment

conferred by unauthorized use of the property, an accounting of the revenues

and expenditures under the co-tenancy Agreement, and specific performance

under paragraph 12, which, in Leslie and Tammy's estimation, gave them the

right to purchase Gregory and Glenda's ownership interest at the price dictated in

subparagraph 12.3.

       On December 1, 2011, while the case was pending, Manson made an

offer to purchase the property. In response to this offer, the parties filed cross
No. 71036-2-1/7

motions for summary judgment on January 27, 2012. Leslie and Tammy moved

for summary judgment on their specific performance claim. Gregory and Glenda

moved for dismissal of Leslie and Tammy's claims for breach of contract and

specific performance. They also requested specific performance of paragraph 13,

which they argued authorized them to close the sale to Manson over Leslie and

Tammy's objection. On February 24, 2012, the trial court entered an order

dismissing Leslie and Tammy's claim for specific performance and authorizing

Greg and Glenda to close the sale to Manson unless Leslie and Tammy

"elect[ed] to match the offer & proceeded] to provide proof of actual ability to do

so as one would be required to do in any other bona fide offer." CP at 505.

Claims for damages between the parties were reserved for future proceedings.

       Subsequently, Leslie and Tammy offered to purchase the property and the

trial court heard evidence on whether they could match Manson's offer. The

evidence showed that Manson had offered to purchase the property for $1 million

cash plus indemnity for liability the tenants and their father Bruce might face for

environmental cleanup associated with the property, including attorney's fees, up

to $1,695,000. Manson also provided corporate documents and the declaration

of its chief financial officer, which established that it had $26 million in cash or

cash equivalents on hand to pay the purchase price without a financing

contingency, as well as additional assets of $367 million and annual sales of

$433 million to back up the indemnity.

       Leslie and Tammy offered to match the $1 million purchase price and

provide a similar indemnification agreement to Gregory and Glenda. In support of
No. 71036-2-1/8

their ability to fulfill this offer, Leslie and Tammy provided declarations and

various exhibits, which established that Leslie and Tammy had acquired

conditional financing from Key Bank in the form of home equity lines of credit

totaling $600,000, pending appraisal, title, and insurance approval. Leslie also

submitted evidence of $431,580.47 maintained in her own brokerage accounts

and retirement accounts and those of Paul Neir,4 whom she claimed was "willing

and able" to pledge the funds. CP at 2292. Tammy submitted evidence of

$311,554.45 maintained in her checking, brokerage, and retirement accounts.

Leslie and Tammy also listed real estate assets, which included their personal

residences and investment properties, minus outstanding home equity loans,

valued at approximately $2.8 million.

       On February 28, 2012 the trial court found that Leslie and Tammy had

failed to match the purchase offer and ordered them to "cooperate in order to

facilitate the closing" of the sale to Manson. CP at 508. On May 21, 2012 Leslie

and Tammy filed a motion to vacate the order of February 28 on the basis that

neither the real estate contract with Manson nor the court's order regarding sale

reflected the market value of the property. They requested that the court order

Gregory and Glenda to proffer a real estate contract

        that comport[ed] with the actual appraised value of the property,
        or that the Court in light of the evidence illegally not submitted
        by Plaintiffs' counsel allow the Plaintiffs to purchase the
        Defendants interests, at the price they have agreed to sell to
        Manson, so that Plaintiffs retain their property as they so desire;
        or, due to all of the new evidence presented, the facts not heard
        or weighed by the Court, and for the fact that there has been

       4 Mr. Neir's relationship to the parties is unclear from the record.
No. 71036-2-1/9

       three subsequent amendments to the real-estate contract by
       Manson and the Defendants which have not been seen by the
       Court or the Plaintiffs, that the prior signed orders be stricken
       and a new summary judgment hearing be noted. CP at 511-12.

The trial court denied this motion and entered an order authorizing Gregory and

Glenda to execute the closing documents. Pursuant to the trial court's order, the

sale to Manson closed on June 28, 2012.

       Because the February 24 and 28, 2012, summary judgment orders did not

resolve issues related to claims for damages, Leslie and Tammy's breach of

contract and unjust enrichment claims proceeded. Greg and Glenda jointly

moved for summary judgment dismissal of the breach of contract claim insofar as

it arose from the sale of the property, arguing that, as a matter of law, the sale

was in line with paragraph 13 and the court's February 24 and 28 orders and did

not constitute a breach of contract. They also argued that Leslie and Tammy

failed to establish disputed facts regarding whether their other alleged acts or

failures to act constituted breach of contract or resulted in unjust enrichment.

       On January 3, 2013, the trial court entered partial summary judgment,

decreeing that the sale of the property did not constitute a breach of contract. But

it denied summary judgment with respect to the remaining theories, finding

disputed facts as to "whether any duty to each other was breached." CP at 1522.
       On January 4, 2013, Leslie and Tammy filed an amended complaint,

which added claims of bad faith, gross negligence, and breach of fiduciary duties

(against Gregory only) and quasi-fiduciary duties. Discovery proceeded for eight
months, during which time Leslie and Tammy stipulated to the dismissal of the
No. 71036-2-1/10

breach of quasi-fiduciary duty claim against both Gregory and Glenda and the

unjust enrichment claim against Glenda.

      At the close of discovery, Gregory and Glenda each moved for summary

judgment on the remaining claims against them. The trial court granted both

motions on September 13, 2013.

      Leslie and Tammy appeal.

                                  DISCUSSION

                                          I.

      Leslie and Tammy contend the trial court erred when it denied their claim

for specific performance under paragraph 12, but granted specific performance to

Gregory and Glenda under paragraph 13. They also contend that the trial court

erred when it found that Leslie and Tammy failed to match Manson's purchase

offer and authorized the sale to Manson over their objection.

       Because the issues on appeal arise from summary judgment proceedings,

our inquiry is the same as the trial court's, with questions of law reviewed de

novo and the facts and all reasonable inferences from the facts viewed in the

light most favorable to the nonmoving party. Christensen v. Grant Cntv. Hosp.

Dist. No. 1. 152 Wn. 2d 299, 305, 96 P.3d 957 (2004). Summary judgment is

proper only in the absence of a genuine issue of material fact. Id.; CR 56(c).
Here, our review hinges on which provision, as a matter of law, rightly governed

the disposition of the property in this case. See, Maver v. Pierce Cntv. Med.

Bureau. Inc.. 80 Wn. App. 416, 420, 909 P.2d 1323 (1995) (explaining that this

                                          10
No. 71036-2-1/11

court will not read an ambiguity into a contract that is otherwise clear and

unambiguous and interpretation of an unambiguous contract is a matter of law).

       Paragraph 12 authorizes the purchase of the ownership interest of any

cotenant in "default or breach of any provision of [the] Agreement" by the

remaining cotenants. CP at 187. The provision is triggered by the default, breach,

or "transfer or attempted transfer not in accordance with the terms and

provisions" of the Agreement by any cotenant. Id. Subparagraph 12.1 provides:

       In the event of any default or breach of any provision of this
       Agreement, or of any transfer or attempted transfer not in
       accordance with the terms and provisions hereof, by any Tenant
       (the "Defaulting Tenant"), any of the remaining Tenants may make
       written demand that such default or breach be cured or that such
       transfer be undone or that such proposed transfer be abandoned,
       as the case may be. Ifthe Defaulting Tenant shall fail to fully
       comply with such demand within sixty (60) days after such demand
       is delivered to such Defaulting Tenant, then the remaining Tenants
       shall have the right, at their option exercisable at any time prior to
       full compliance with such demand and after the expiration of such
       sixty (60) day period, to purchase all (but no less portion) of the
       Defaulting Tenant's interests in the Tenancy.

CP at 187. Subparagraph 12.3 sets forth a formula for calculating the purchase

price of a defaulting tenant's ownership interests based on a percentage of all

payments made for the purchase and maintenance of the property. Thus, tenants

purchasing an ownership interest pursuant to paragraph 12 have the benefit of

acquiring it at a price unrelated to the fair market value.

       Leslie and Tammy argue that paragraph 12 was triggered when Gregory

and Glenda materially breached the Agreement in three ways: (1) giving

permission to Snopac to occupy a portion of the property without a written lease

and without Leslie and Tammy's consent; (2) allowing Double E Foods to lease a

                                          11
No. 71036-2-1/12

portion of the warehouse for storage without Leslie and Tammy's consent; and

(3) allowing Manson to lease 15 parking spaces without Leslie and Tammy's

consent. They claim that, because Gregory and Glenda failed to timely remit

payment of the damages claimed in their "60-Day Notice to Cure" letter, Leslie

and Tammy acquired the right to purchase their ownership interests as set forth

in subparagraph 12.3. They are mistaken.

       At common law, each of the tenants had a non-exclusive right to use the

entire property, so long as they did not prevent the other siblings from also using

the property:

           Each tenant in common has a right to possess and enjoy the
       premises and may do so as if he or she is the sole owner. No
       tenant may bar another tenant in common from exercise of the
       same right or commit waste. United States v. Washington, 520 F.2d
       676 (9th Cir. 1975), cert, denied. 423 U.S. 1086 (1976); De la Pole
       v. Lindlev. 131 Wash. 354, 230 P. 144 (1924).

1 Washington Real Property Deskbook, §3.2(2) (4th ed. 2009); see also. In re

Foreclosure of Liens, 130 Wn.2d 142, 148, 922 P.2d 73 (1996) (citing Rouse v.

Glascam Builders. Inc., 101 Wn.2d 127, 130, 677 P.2d 125 (1984)) ("The

essential attribute of a tenancy in common is possession; each cotenant is the

holder of an undivided interest in the whole of the property, with the right to

possession and enjoyment of the whole property."). Under this rule, Gregory and

Glenda were entitled to any use of the property not prohibited by the Agreement

that did not oust their cotenants or result in waste. Because the Agreement did

not prohibit granting others limited license to use the property, such use was

presumptively permitted, subject to the prohibitions against ouster and waste.

                                         12
No. 71036-2-1/13

Here, Snopac's use between September 2009 and May 2011 did not interfere in

any way with Tammy or Leslie's intended use or commit waste. Thus, as a

matter of law, this use was not a breach of contract that triggered the default

provisions of paragraph 12. As to the alleged breaches due to the unauthorized

leases to Double E Foods and Manson, it appears undisputed that both

companies vacated the property within the 60 day deadline established by

paragraph 12.

       Leslie and Tammy also contend they were entitled to damages resulting

from the occupancy of SnoPac, Double E Foods and Manson during 2009 -

2011, arguing that merely vacating the property within 60 days was insufficient to

cure the breach. They claim they are entitled to damages in the amount of the

market value of the space utilized by Sno-Pac, Double E Foods and Manson or,

in the alternative, a fair share of the amounts paid by Double E Foods and

Manson, arising from their occupancy. The claim is without merit. As discussed

above, Snopac's occupancy was not a breach of the Agreement and, thus did not

give rise to a claim for damages. As to the damages arising from the occupation

by Double E Foods and Manson, it is apparent from the record that the sums

received from them were used to offset amounts owing by Leslie and Tammy as

their contributions to the tenants' shared tax and utility obligations.

       Given that no factual dispute exists regarding the timely cure of the only

breaches of contract alleged to have triggered the default provisions of

paragraph 12, summary judgment denying specific performance of that provision

was proper.

                                          13
No. 71036-2-1/14

        Leslie and Tammy also argue that the trial court improperly authorized the

sale of property under paragraph 13 or, in the alternative, that they were

improperly denied their right of first refusal to buy out Gregory and Glenda's

interests in the property. Both arguments lack merit.

        Paragraph 13 provides a method for sale of the property in the event of

deadlock on an issue requiring agreement of tenants owning a majority of the

total undivided interests. Under subparagraph 13.1, any tenant, acting

individually or jointly with others, may present a bona fide offer to purchase the

property in writing at any time. Such offer may be from a tenant or group of

tenants or a third party. Subparagraph 13.2 provides that presentation of such an

offer triggers a thirty day response period. At the close of the thirty days, and

regardless of whether an agreement is reached, the purchase offer will be

deemed accepted, with each tenant entitled to his or her fair share of the

proceeds of sale. CP at 190. However, subparagraph 13.3 provides a tenant the

right to buy out the remaining tenants' interests in preference over the

outstanding offer so long as the tenant's offer is "equivalent in amount and

method of payment" and "upon the same terms and conditions" as the proposed

sale.5 CP at 191-93.

        Leslie and Tammy argue that the trial court erred when it refused to allow

them to exercise their right under subparagraph 13.3 to purchase Gregory and

Glenda's ownership interests. They contend that their offer was equivalent in an

        5 The amount of an equivalent offer is determined after a proportional adjustment to
exclude the share or shares of the opposing tenant or tenants. In this case, an equivalent offer
amount would be $500,000 after excluding the shares owned by Leslie and Tammy.

                                                14
No. 71036-2-1/15

amount and method of payment and upon the same terms and conditions as the

proposed sale of the property to Manson. We disagree. Because Manson offered

$1 million cash with no conditions, Leslie and Tammy had to make an

unconditional offer of at least $500,000, payable within 30 days of the date on

which Manson submitted its offer. The undisputed evidence showed they were

unable to do so. Instead their offer consisted of purported financing from Key

Bank in the amount of $600,000, $100,000 of which was to be used to pay off

Tammy's existing mortgage and the rest put toward the purchase of Gregory and

Glenda's interests in the property at the price offered them by Manson. But this

financing was conditional and neither Leslie nor Tammy offered evidence that

they had or would timely meet these conditions. Moreover, it is evident from their

declarations that they intended to finance the purchase of the property with either

the Key Bank loans or their personal assets, but not both. They each state: "If I

do not choose to finance the purchase of Gregory and Glenda's interests in the

property with the Key Bank loan, I have sufficient liquid or near-liquid assets

available to purchase their interests." CP at 2292, 2339. Thus, they did not intend

to fund the purchase with a combination of loan funds and personal assets

should they fail to secure all of the financing.

       Additionally, although Leslie and Tammy provided evidence of assets

valued at significantly more than $500,000, given the 30 day time frame provided

under paragraph 13, a substantial portion of these assets was unavailable to

contribute to the purchase price because it was invested in real estate. The only

liquid assets available to Leslie and Tammy to purchase the property were funds

                                           15
No. 71036-2-1/16

held in brokerage, retirement, and checking accounts, which totaled

$743,134.92. But this amount was contingent upon contribution by a third party,

Paul Neir, of over $355,138.09. Although Leslie and Tammy offered bank records

establishing that Neir's accounts held the amounts claimed, they presented no

affidavit or other admissible evidence in support of Neir's willingness to pledge

that money toward the purchase of the property. Because Leslie's statement in

her declaration that he was "willing and able" to do so is inadmissible hearsay, it

was properly not considered on summary judgment. ER 801, 802; Dunlap v.

Wayne, 105 Wn.2d 529, 535, 716 P.2d 842 (1986). The admissible evidence on

summary judgment established only that Leslie and Tammy had $387,996.83 in

their combined accounts, which fell short of the $500,000 cash they needed to

match Manson's offer.

        Because there are no disputed facts regarding Leslie and Tammy's

inability to timely match Manson's offer to purchase, Gregory and Glenda were

entitled to summary judgment decreeing that Leslie and Tammy failed to match

the offer and authorizing Gregory and Glenda to close the sale.6

                                                II.

        Leslie and Tammy also challenge the trial court's September 13, 2013

orders dismissing their breach of contract and various tort claims against Gregory

        6 Because Leslie and Tammy failed to match the cash portion of the purchase offer, we
do not consider their claims that they matched the indemnity portion of the offer and that the
promise to indemnify was illusory. Accordingly, we do not address the parties' cross-motions for
additional evidence on review, which ask us to consider evidence not before the trial court
regarding the purported value of the indemnity.

                                                16
No. 71036-2-1/17

and Glenda, arguing that disputed facts precluded summary judgment as to each

claim. We find their arguments without merit.

       With respect to Leslie and Tammy's breach of contract claim against

Gregory, the trial court concluded that summary judgment was proper given

Leslie and Tammy's failure "to establish with a degree of certainty the amount of

damages to which they might be entitled as a result of any alleged breach. . .."

CP at 2019. We agree.

       During summary judgment proceedings, Leslie and Tammy asserted three

bases for damages in support of their breach of contract claim against Gregory:

(1) his refusal to fund repairs related to the 2001 Nisqually earthquake; (2) his

refusal to fund general repairs and maintenance; and (3) lost profits, rents, or

opportunities to lease or sell the property. None is sufficient to raise a fact issue

as to damages.

       Claims for damages under the first theory are barred by the six-year

statute of limitations governing actions for enforcement of a contract because

they were not initiated until over a decade after the claim accrued. RCW

4.16.040; 1000 Virginia. Ltd. Partnership v. Vertecs Corp., 158 Wn.2d 566, 575

(2006) (a claim arising out of contract accrues on breach).

       Next, to the extent Leslie and Tammy have asserted losses related to

Gregory's refusal to fund general repairs and maintenance, lost profits, rents, or

opportunities to lease or sell the property, such losses are purely speculative and

insufficient to raise a fact issue on summary judgment. See, ESCA Corp. v.

KPMG Peat Marwick, 86 Wn. App. 628, 639, 939 P.2d 1228 (1997) "Although the

                                          17
No. 71036-2-1/18

precise amount of damages need not be shown, damages must be supported by

competent evidence in the record. To be competent, the evidence or proof of

damages must be established by a reasonable basis and it must not subject the

trier of fact to mere speculation or conjecture." ]d_. A party seeking lost profits

damages must show that they would have earned the claimed profits, but for the

defendant's breach. Tacoma Auto Mall, Inc. v. Nissan North America, Inc., 169

Wn. App. 111, 135, 279 P.3d 487 , review denied, 175 Wn.2d 1024, 291 P.3d

253 (2012), (citing Larsen v. Walton Plywood Co., 65 Wn.2d 1, 15, 390 P.2d 677,

396 P.2d 879 (1964)); see also, Spradlin Rock Products, Inc. v. Public Utility Dist.

No. 1 of Grays Harbor County, 164 Wn. App. 641, 645, 266 P.3d 229 (2011)

(finding sufficient evidence of lost profits damages to withstand summary

judgment where the plaintiff established a particular construction project foregone

as a result of defendant's delayed performance and a likelihood to be awarded

the project based on an ongoing business relationship with the sponsor of the

project); Golf Landscaping Inc. v. Century Construction Co., 39 Wn. App. 895,

696 P.2d 590 (1984) (finding plaintiffs alleged lost profits damages were purely

speculative where the claim was based entirely on a list of projects appearing in

a journal that it could have hypothetical^ bid on during the delay caused by

defendant's breach and testimony that it would normally bid on one job per week

with a twenty-five percent success rate).

       In this case, Leslie and Tammy's opposition to Gregory's motion for

summary judgment cited no evidence of repair or maintenance costs incurred by

them or particular lost profits, rents, or opportunities. Instead, their opposition

                                           18
No. 71036-2-1/19

brief was comprised entirely of argument as to why their claim for repair costs

related to the Nisqually earthquake was not time barred and evidence of

Gregory's alleged breach of contract and tortious acts. They cited no provision in

the Agreement which entitled them to repair costs or expenses that have yet to

be incurred and a review of the contract reveals no such provision.7 Nor do they

argue that Gregory or Glenda prohibited them from undertaking the repairs

themselves and thereafter seeking reimbursement from their cotenants pursuant

to the Agreement.

       Leslie and Tammy also contend that they sustained a loss equal to their

share of fair market rent for the 53 months between Snopac's initial departure in

2008 and the ultimate sale of the property. But, because the co-tenancy

agreement did not require any cotenant to agree to any lease or require the

managing tenant to maintain Snopac or any other lessee in the property, Leslie

and Tammy had no contractual right to such amounts.

       They also claim that they are entitled to the fair market value of the space

utilized by Double E Foods and Manson or, in the alternative, a fair share of the

amounts paid by Double E Foods and Manson during their occupancy. But, it is

undisputed that the monies paid by Manson and Double E Foods offset the

shared obligation of the co-tenants to pay property taxes and utility costs during

their occupancy; thus, Leslie and Tammy have already received a fair share of

the amounts paid and cannot show damages under this theory.

       7 By contrast, the Agreement expressly requires tenants to reimburse the tenancy or a
cotenant for expenditures and costs actually incurred on the behalf of the tenancy.

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No. 71036-2-1/20

        On appeal Leslie and Tammy reassert claims for damages arising from

Gregory's alleged failure as managing tenant to obtain a written lease agreement

from Snopac and the tenancy's alleged losses resulting from the sale of the

property at below market value.8 Regardless of whether these claims raise a

factual dispute as to damages, they do not create an issue of fact regarding

whether Gregory breached the Agreement, which does not oblige the managing

tenant to secure a written lease agreement from Snopac or any other lessee. Nor

does it require that an offer tendered and accepted pursuant to paragraph 13,

such as the purchase offer from Manson, represent fair market value of the

property.

        We conclude that Leslie and Tammy's breach of contract claim against

Gregory was properly dismissed based on their failure to raise a fact question as

to each essential element.

        We also conclude that Glenda was entitled to summary judgment on the

breach of contract claim against her. Leslie and Tammy claimed that Glenda's

alleged refusal to agree re-let the property or fund repairs related to the Nisqually

earthquake constituted a breach of the Agreement, which resulted in damages.

Based on the plain language of the Agreement, which implicitly granted each

cotenant the right not to agree and expressly contemplated deadlock among the

cotenants on such issues as leasing the property, Glenda's mere refusal to agree

        8 The claims were withdrawn previously in response to the trial court's January 3, 2013
order dismissing certain damages claims unrelated to: (1) lost rents from 2008-2012; (2)
damages from allowing Gregory as a cotenant to store Snopac's equipment between September
2009 and May 2011; and (3) damages related to allowing Manson to park 15 employee cars on
the property.

                                              20
No. 71036-2-1/21

to lease the property was, as a matter of law, not a breach of contract. See,

Mayer, 80 Wn. App. at 420. Because Leslie and Tammy's remaining claims for

losses related to the Nisqually earthquake are time barred and their claimed

losses resulting from the failure to fund general repairs and maintenance are

purely speculative, they fail to establish any actionable breach of contract on

Glenda's part. Accordingly, she was entitled to judgment on this claim.

       Leslie and Tammy also failed to raise a fact question on each of their tort

claims. As a matter of law, their bad faith and gross negligence claims against

Gregory and Glenda are barred under the independent duty doctrine, which

generally bars recovery for tortious misconduct where a contractual relationship

exists and the losses are purely economic losses. Eastwood v. Horse Harbor

Found.. Inc.. 170 Wn.2d 380, 393-95, 241 P.3d 1256 (2010). Although, we

recognize an exception to this rule where a defendant's alleged breach of

contract implicates a tort duty that arises independently of the terms of the

contract, (see, e.g., Id. at 393-94), the exception is inapplicable here because

Leslie and Tammy's bad faith and gross negligence claims are based solely on

Gregory and Glenda's alleged breach of an express contractual provision

(paragraph 17) and the "'duty of good faith and fair dealing ... implied in every

contract.'" CP at 1489 (quoting 6A Washington Pattern Jury Instructions:

Civil (WPI) 302.11 (6th ed. 2012).

       Unlike their bad faith and gross negligence claims, Leslie and Tammy's

breach of fiduciary duty claim has a firm basis in tort law and, as such, is not

precluded under the independent duty doctrine. See. Micro Enhancement Intern.,

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No. 71036-2-1/22

Inc.. v. Coopers & Lvbrand. LLP, 110 Wn. App. 412, 433-34, 40 P.3d 1206

(2002). Nevertheless, Gregory was entitled to judgment on this claim because

Leslie and Tammy failed to establish they incurred any damages as a result of

the alleged breach. See. ]d. (explaining that in a breach of fiduciary duty claim it

is the plaintiff's burden to establish: (1) existence of a duty owed, (2) breach of

that duty, (3) resulting damage, and (4) that the claimed breach proximately

caused the injury).

       In support of their breach of fiduciary duty claim, Leslie and Tammy

asserted damages arising from: (1) Gregory's failure to secure a written lease

from Snopac and attendant losses resulting from Snopac's departure without

notice in February 2008; (2) his failure to require Snopac to maintain insurance

on the property, resulting in the tenancy bearing the cost of repairing damage

from the 2001 Nisqually earthquake; (3) his failure to lease and refusal to agree

to lease to a new tenant after Snopac's initial departure in 2008, which resulted in

lost profits, rents and opportunities; and (4) his entry into lease agreements with

Double E Foods and Manson without proper authorization. To the extent their

breach of fiduciary duty claim is based on the first three theories, it is barred

under the statute of limitations because it was not filed until January 4, 2013,

more than three years after the claim accrued. RCW 4.16.080(2); Hudson v.

Condon. 101 Wn. App. 866, 872-73, 6 P.3d 615 (2000) (holding that a breach of

fiduciary duty claim is subject to the three-year tort statute of limitations). And, as

discussed previously, Leslie and Tammy cannot establish damages resulting

from the leases to Double E Foods and Manson because they undisputedly

                                          22
No. 71036-2-1/23

received their fair share of the monies collected from those companies. Given

Leslie and Tammy's failure to establish damages on their breach of fiduciary duty

claim, Gregory was entitled to judgment.

      Affirmed.

WE CONCUR:                                         V)             '

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