Court Opinion

ID: 4711071
Source: CourtListenerOpinion
Date Created: 2021-08-12 00:36:33.413149+00
Date Added: 2024-06-11T08:07:06.706084
License: Public Domain

Sanders, J.,
(concurring) — I agree with the majority that "frustration of purpose” does not excuse McCarthy’s payments on the promissory note, but I recognize his frustration.
Fully Executed Contract
Commercial frustration is not a defense for McCarthy because he had already completed his obligations arising from the original transaction by the time he defaulted on the note.
In December 1986, McCarthy exercised his option to purchase the Felts’ land and the sale closed. In return for a statutory warranty deed, McCarthy paid the Felts a cash down payment of $119,963.55 plus delivered a promissory note for $89,627.84. "As between the maker and the payee, *212a promissory note is but a simple contract to pay money.” Vancouver Nat’l Bank v. Katz, 142 Wash. 306, 313, 252 P. 934 (1927). In this case, this purchase was complete when the Felts exchanged the title for cash and the promissory note. See Charleston Hills Nat’l Mines v. Clough, 79 Nev. 182, 380 P.2d 458, 461 (1963) ("In the present case the contracts between the corporation and respondent represented by the two promissory notes became complete upon her [respondent’s] acceptance of the notes . . . .”).
In Edwards v. Petrone, 160 Wis. 2d 255, 465 N.W.2d 847, 848 (1990), review denied, 471 N.W.2d 510 (1991), the payor of a promissory note, Petrone, refused to pay the remainder of the note to the payee, Edwards, and claimed the affirmative defenses of failure of consideration and accord and satisfaction. In . holding that the defense of failure of consideration was not available to the payor, the court noted that an executed contract is a contract in which all promises have been fulfilled and nothing remains to be done, while an executory contract is one in which the parties have bound themselves to future activity that is not yet completed. Id. The court concluded:
The promissory note from Petrone to Edwards is an executed contract. Edwards delivered $50,000 to Petrone and Petrone, in exchange, gave his written promise, the promissory note, to repay the money. Promises were exchanged and nothing more had to he done to complete the contract. The requirement that Petrone make payments does not make the promissory note an executory contract. All of the acts necessary to give rise to Petrone’s obligation—a delivery of money and a promise to repay—have been performed.
Id. (citations omitted). See also Hotchkiss v. James, 65 N.E.2d 161, 163 (Ohio Ct. App. 1945) ("Therefore at the moment the note was delivered to the plaintiff the obligation of defendant under the contract was fully performed.”)
When McCarthy delivered the down payment and promissory note to the Felts and they, in turn, conveyed the property to him, the purchase and sale contract was executed. However, it was this contract which McCarthy now *213claims was frustrated by the Snohomish County wetlands motions. McCarthy’s default, however, was on the promissory note, a separate contract. McCarthy cannot be excused from his obligations under the promissory note based upon the frustration of the first contract. "[E]ven a plausible claim of frustration asserted with respect to a contract that has been fully performed is almost certain to fail.” Andrew Kull, Mistake, Frustration, and the Windfall Principle of Contract Remedies, 43 Hastings L. J. 1, 18 (1991).1
Frustration
Other than the fully executed nature of this purchase transaction, this case is remarkably similar to Weyerhaeuser Real Estate Co. v. Stoneway Concrete, Inc., 96 Wn.2d 558, 637 P.2d 647 (1981). In Weyerhaeuser, we stated that where there is a "supervening event” that frustrates the purpose forming the basis of the lease and this event is, or reasonably should have been, foreseen by the parties and there is no provision in the lease concerning it, then an inference that the risk was assumed by the promisor is justified. Id. at 564. We then determined that the denial of the necessary permit was not foreseeable because of unanticipated "flood of environmental legislation and litigation . . . which motivated environmentalists to adamant opposition” to the strip-mining project which was the purpose of the lease. Id. Of particular note to the court was the fact that Stoneway produced and sold sand, gravel, concrete, and asphalt. Id. at 562-63. That is, the court was particularly cognizant of the fact that the party wishing to use the land was in the business of producing materials associated with the expected use of the land. The fact that Stoneway was a gravel company weighed heavily in our *214determination that use of the land for gravel production was the basis of the entire contract.
From all appearances in the record, it is clear that McCarthy was a land developer and that he purchased the land in question in order to develop it, consistent with existing zoning, as a business park. The majority opinion acknowledges this. Majority Op. at 205. The Felts understood this. Indeed, in the option contract, the Felts agreed to, among other things, a clause that read:
Upon request by Purchaser, Seller shall execute an application to have said property rezoned to a business park land use classification ....
Clerk’s Papers at 49.
McCarthy paid a high price for the land because he expected it could be used for a business park. The Felts did not dispute a subsequent appraisal of the land at only $50,000 assuming no potential business park use. In contrast, the purchase price McCarthy bargained for with the Felts was $310,000 based on the business park expectation. Obviously, McCarthy’s purpose to purchase the parcel was to develop a business park. And, in fact, the record shows that absent the prospect of eventual development of the business park McCarthy would not have purchased the land. See Washington State Hop Producers, Inc. Liquidation Trust v. Goschie Farms, Inc., 112 Wn.2d 694, 700, 773 P.2d 70 (1989).
Moreover, it is hard to see how the county wetlands motions in this case were foreseeable while the negative public reaction to development in Weyerhaeuser was not. McCarthy may have been a skilled land use lawyer, but clairvoyance about future governmental actions is beyond any mortal.
It should be noted, however, it is not clear these motions would have affected the use of this plot of land. The wetlands motions in this case were just that: motions. The basic rule in land use law is that, absent more, an individual should be able to use his land as he sees fit. Norco Con*215str., Inc. v. King County, 97 Wn.2d 680, 684, 649 P.2d 103 (1982). A land use ordinance has the force of law, and anything less is only a mere expression of opinion. Baker v. Lake City Sewer Dist., 30 Wn.2d 510, 518, 191 P.2d 844 (1948). Also, the Snohomish County Charter requires all land use regulations to be adopted by ordinance. Snohomish County Charter § 2.20(4). Therefore, short of Snohomish County’s adoption of an ordinance, preexisting land use restrictions did not change.
For these reasons, I concur McCarthy cannot be lawfully excused from paying the remainder of the promissory note under the doctrine of commercial frustration.

 I decline the opportunity to examine whether the defense of frustration on the underlying contract is available to McCarthy under RCW 62A.3-305(a)(2) because it has not been adequately briefed. But see Resolution Trust Corp. v. Maplewood Invs., 31 F.3d 1276, 1283-84 (4th Cir. 1994) (holder able to assert common law defense of underlying contract in suit on the note assuming no statutory limitations or procedural bars).