Battle Ground Plaza, LLC v. Maldonado
| Decision Date | 19 August 2014 |
| Docket Number | 43874-7-II |
| Court | Washington Court of Appeals |
| Parties | BATTLE GROUND PLAZA, LLC, Appellant/Cross Respondent, v. DEAN MALDONADO and JANE DOE MALDONADO, husband and wife and their marital community; MILLS END, LLC; ME.LS END CENTER, LLC; DRKBG, LLC; DOUGLAS RAY; and IRWIN JESSEN; Respondents/Cross Appellants. |
UNPUBLISHED OPINION
Battle Ground Plaza LLC (BG Plaza LLC) appeals the superior court's (1) grant of summary judgment for Douglas Ray and the Estate of Irwin Jessen (Jessen) on its right of first refusal claim; (2) denial of summary judgment on its seniority claim against Dean Maldonado; and (3) award of attorney fees and costs to Ray and Jessen. Ray and Jessen contracted to sell the Battle Ground Plaza Shopping Center (BG Plaza Property) to BG Plaza LLC. The contract included a right of first refusal provision for an adjacent 0.5 acre undeveloped parcel (undeveloped parcel).
First BG Plaza LLC argues the superior court erred by granting summary judgment for Ray and Jessen because they failed to comply with the right of first refusal provision. BG Plaza LLC argues Ray and Jessen contracted to sell the undeveloped parcel to Maldonado without advising BG Plaza LLC of the "Reciprocal Easement Agreement" for parking it entered into with Maldonado as part of the undeveloped parcel sale. But the bankruptcy court previously approved the sale of the undeveloped parcel to Maldonado and issued a final order on the sale. Thus, BG Plaza LLC's claim is precluded under the doctrine of collateral estoppel and is an improper collateral attack. We affirm the superior court's grant of summary judgment in favor of Ray and Jessen.
Second BG Plaza LLC argues the superior court erred by denying its motion for summary judgment on its seniority claim because its rights to the BG Plaza Property are senior to any right Maldonado received in the Reciprocal Easement Agreement. Because the sale of the BG Plaza Property has not closed, BG Plaza LLC does not have an ownership interest in the BG Plaza Property. Thus, BG Plaza LLC's seniority claim is merely hypothetical and speculative and does not present an actual present, and existing dispute that is ripe for review.[1] We affirm the superior court's denial of BG Plaza LLC's summary judgment motion.
Last BG Plaza LLC argues the superior court abused its discretion when awarding Ray and Jessen attorney fees and costs and denying its request for an offset of attorney fees. We disagree and affirm the superior court's award of attorney fees.
We affirm the trial court's grant of summary judgment in favor of Ray and Jessen, its denial of BG Plaza LLC s summary judgment motion, and its award of attorney fees.
As of 2000, Ray and Jessen owned the BG Plaza Property and an adjacent undeveloped parcel in the City of Battle Ground. On August 10, 2000, Ray filed for relief under Chapter 11 of the United States Bankruptcy Code.
In December 2000, Ray and Jessen entered a purchase and sale agreement to sell the BG Plaza Property (BG Plaza Agreement) to Bruce Feldman, Inc., who later assigned its interest as purchaser to BG Plaza LLC. The BG Plaza Agreement granted BG Plaza LLC a right of first refusal to purchase the adjacent undeveloped parcel.[2]
On June 8, 2001, the bankruptcy court approved the sale of the BG Plaza Property to BG Plaza LLC. In March 2002, the bankruptcy court approved Ray's third amended plan. This plan included the sale of both the jointly owned BG Plaza property to BG Plaza LLC and the undeveloped parcel. Under the plan, the undeveloped parcel was to be sold either under the terms of the right of first refusal or to another third party should BG Plaza LLC not elect to exercise its right of first refusal.
On May 18, 2005, Ray and Jessen entered a purchase and sale agreement to sell the undeveloped parcel (Parcel Agreement) to Maldonado. The Parcel Agreement included a provision that Maldonado's "obligation to purchase the Property [was] conditioned on ... Review and acceptance of the cross parking agreements."[3] Clerk's Papers (CP) at 69 (emphasis in original). The Parcel Agreement also required Ray and Jessen to deliver to Maldonado within ten days after the execution date a copy of a "[c]ross easement for access and parking" document. CP at 70 (emphasis in original). On May 31, Maldonado signed an addendum to the Parcel Agreement that referenced the BG Plaza Agreement and BG Plaza LLC's right of first refusal for the undeveloped parcel.
On May 27, BG Plaza LLC received notice of the Parcel Agreement. BG Plaza LLC neither exercised nor declined to exercise its right of first refusal, claiming that its right of first refusal was not ripe until its purchase of the BG Plaza Property closed. On July 5, the bankruptcy court approved the sale of the undeveloped parcel to Maldonado. BG Plaza LLC never appealed this order.
On October 8, Maldonado, Ray, and Jessen amended the Parcel Agreement, reducing the purchase price and extending the closing date. On October 18, BG Plaza LLC received notice of the amended Parcel Agreement and, on October 21, gave Ray and Jessen notice of its intent to exercise its right of first refusal. At the same time it provided a $5, 000 promissory note and stated that principal and interest would be payable by December 19. Shortly thereafter, Ray moved the bankruptcy court to approve the modified sale of the undeveloped parcel to Maldonado. BG Plaza LLC objected to the proposed sale and asserted the sale violated the conditions of its right of first refusal. It also requested all cross parking agreements and other documents pertaining to both properties from Ray and Jessen. Jessen's counsel did not respond to BG Plaza LLC's request.
On November 1, the bankruptcy court approved the sale of the undeveloped parcel to Maldonado with the revised sale price. The bankruptcy court ruled that the sale was "free and clear of liens and encumbrances pursuant to 11 USC § 363, including but not .limited to the right of first refusal granted to Battle Ground Plaza, LLC, and the deed of trust granted to Battle Ground Plaza, LLC, by Irwin P. Jessen in favor of Battle Ground Plaza, LLC." CP at 178. The bankruptcy court found that BG Plaza LLC s attempted exercise of its right of first refusal failed to mirror the Parcel Agreement. Subsequently, the bankruptcy court denied BG Plaza LLC's motion for reconsideration. BG Plaza LLC did not appeal the bankruptcy court's approval of the undeveloped parcel sale to Maldonado or the order denying its motion for reconsideration.
In November 2005, the undeveloped parcel sale closed; shortly thereafter Ray, Jessen, and Maldonado executed and recorded a Reciprocal Easement Agreement. The sale of the undeveloped parcel enabled Ray to pay the remaining creditors' claims under the terms of his chapter 11 plan and, on December 29, the bankruptcy court entered a final decree closing Ray's bankruptcy case.
In June 2006, BG Plaza LLC first learned of Ray, Jessen, and Maldonado's Reciprocal Easement Agreement. On July 5, BG Plaza LLC commenced a lawsuit in Clark County Superior Court against Ray, Jessen, Maldonado, and Maldonado's successor entities for specific performance, [4] damages, and declaratory relief, arguing that Ray and Jessen had failed to comply with the terms of BG Plaza LLC's right of first refusal because they did not advise BG Plaza LLC of their intent to execute the Reciprocal Easement Agreement.
Maldonado, joined by Ray and Jessen, moved to dismiss the lawsuit on the basis that the superior court lacked subject matter jurisdiction. The superior court remanded the case to the United States Bankruptcy Court for the Western District of Washington for a determination of whether it had retained jurisdiction. In January 2007, on Ray and Jessen's motion and over BG Plaza LLC's objection, the bankruptcy court reopened Ray's bankruptcy case. On August 29, 2007, the bankruptcy court entered an order retaining jurisdiction over BG Plaza LLC's claim for specific performance and concerning the respective parties' rights under the Reciprocal Easement Agreement.[5]
The Estate of Jessen[6] filed a motion for summary judgment in the bankruptcy court and argued that there were no material issues of fact about whether Ray and Jessen had failed to provide BG Plaza LLC with sufficient notice of all conditions on which they would have sold the undeveloped parcel to Maldonado. The bankruptcy court granted Jessen's motion for summary judgment; ruled that its previous orders approving the sale were final and not subject to collateral attack by BG Plaza LLC in state court; and, ruled that, in any event, Ray and Jessen had complied with the terms of the right of first refusal. BG Plaza LLC appealed to the Bankruptcy Appellate Panel of the Ninth Circuit, which affirmed the bankruptcy court's decision. BG Plaza LLC then appealed to the United States Court of Appeals for the Ninth Circuit. The Ninth Circuit held the bankruptcy court lacked jurisdiction over the state breach of contract claims, reversed the bankruptcy appellate panel, and remanded with instructions to vacate the bankruptcy court's judgment for lack of jurisdiction.[7]
Before the Ninth Circuit issued its opinion, BG Plaza LLC filed a motion for summary judgment in Clark County Superior Court on its seniority claim. Ray, Jessen, and Maldonado asserted that the bankruptcy court still retained jurisdiction over this claim. The bankruptcy court, however, stated that it would not decide the jurisdictional issue on the seniority claim because it was not ripe.
Following remand to the state superior court, BG Plaza LLC moved for summary judgment and argued that the Reciprocal Easement Agreement was junior...
To continue reading
Request your trial