Brust v. McDonald's Corp.

• Decision Date: 07 March 1983
• Docket Number: No. 9599-4-I,9599-4-I
• Citation: 34 Wn.App. 199,660 P.2d 320
• Parties: William P. BRUST and E.A. Thacker, Respondents, v. McDONALD'S CORP. and James Watters and Jane Doe Watters, his wife, Appellants.
• Court: Washington Court of Appeals

Page 199

34 Wn.App. 199

660 P.2d 320

William P. BRUST and E.A. Thacker, Respondents, v. McDONALD'S CORP. and James Watters and Jane Doe Watters, his wife, Appellants.

No. 9599-4-I.

Court of Appeals of Washington,

Division 1.

March 7, 1983.

Williams, Novack & Hansen, Ronald Castleberry, Jeffrey Pratt, Everett, Carney, Stephenson, Badley, Smith & Mueller, Edward Mueller, Seattle, for appellants.

Douglas Bell, Everett, for respondents.

CALLOW, Judge.

The defendants, McDonald's Corporation and James Watters, appeal a judgment, rendered after a non-jury trial, which granted two easements across certain property leased by the McDonald's Corporation from the plaintiffs, William P. Brust and E.A. Thacker. Two issues are presented:

(1) Whether the trial court erred by admitting and considering parol evidence to construe the written lease and amendment to lease.

(2) Whether the trial court erred in refusing to grant equitable relief on the basis of equitable estoppel or laches.

Brust and Thacker (hereinafter collectively referred to as Brust) are the owners of certain parcels of real property on the northeast corner of the intersection at 41st Street and Colby Avenue in Everett, Washington. These parcels will be designated as Parcel 1, Parcel 2, the eastern parcel and the western parcel.

Westbound traffic has direct access to Parcel 1 from 41st. Eastbound traffic on 41st Street, however, does not have direct access to Parcel 1 due to traffic control devices. No other public street provides access to Parcel 1. Parcel 2 lies immediately to the north of and adjacent to Parcel 1. There is no direct access to Parcel 2 from a public street.

The eastern parcel adjoins Parcels 1 and 2 on the east. There is no direct access to the eastern parcel via a public street except for westbound automobile traffic on 41st Street. The western parcel adjoins Parcels 1 and 2 on the west and is located at the northeast corner of the intersection of 41st Street and Colby Avenue. Westbound automobile traffic from 41st Street may directly access the western parcel. Eastbound traffic on 41st Street cannot directly access the western parcel. Northbound and southbound traffic on Colby Avenue can directly access the western parcel.

NOTE: OPINION CONTAINS TABLE OR OTHER DATA THAT IS NOT VIEWABLE

On July 31, 1969, Brust leased Parcel 1 to the McDonald's Corporation (McDonald's), a Delaware corporation, pursuant to a lease (1969 lease) prepared by McDonald's. The lease expressly reserved a 20-foot wide easement over Parcel 1. This reservation granted Brust and his assigns access for automobile traffic from Colby Avenue to Brust's eastern parcel over Parcel 1 (Parcel 1 easement). It also reserved a non-exclusive easement in favor of McDonald's to provide access from Colby Avenue over Brust's western parcel to Parcel 1 (Colby easement). The legal description of the Colby easement was subsequently prepared. However, the Parcel 1 easement, to date, has not yet been identified and located.

After the execution of the 1969 lease, McDonald's constructed a fast food restaurant on Parcel 1. McDonald's then entered into a contractual and sublease arrangement with James Watters, whereby Watters operated the restaurant. On September 21, 1973, Parcel 2 was leased to McDonald's pursuant to a written agreement prepared by McDonald's entitled "Amendment to Lease." McDonald's needed the additional property to expand its parking lot. The amendment also contained language which reserved a 20-foot easement over the leased property (Parcel 2 easement) and granted a reciprocal non-exclusive easement to McDonald's over Brust's adjacent property. The location of this easement has been set by survey to run across Parcel 2.

In the spring of 1978, Watters added a drive-in window served by drive-in lanes. This drive-through improvement included directional curbing upon the pavement, certain landscaping consisting of large planters, and construction of an outside callbox, all of which are located on the northern end of Parcel 1. This improvement has caused rush-hour traffic waiting to use the drive-in window to back up over the alleged Parcel 1 easement so as to block access over that route both to the eastern parcel and to the businesses of Brust's other lessees located on Brust's western parcel. It also blocks utilization of the Parcel 2 easement at times.

On January 12, 1979, Brust complained to McDonald's about the obstruction to the alleged Parcel 1 easement. McDonald's response was to deny the existence of the Parcel 1 easement. Due to the obstruction and because Brust needed the Parcel 1 easement to further develop his eastern parcel, Brust filed suit on October 29, 1979 against McDonald's and Watters for declaratory relief. At trial on September 18, 1980, the trial court granted Brust's request for relief and declared a 20-foot wide easement for automobile purposes across both Parcels 1 and 2; determined that the Parcel 1 easement is to be located on the northerly 40 feet of Parcel 1; required McDonald's and Watters to remove all obstructions within the Parcel 1 easement area; and enjoined them from operating or conducting their business in a manner so as to unreasonably obstruct or hinder the free flow of traffic upon the easements over Parcel 1 and 2. Brust was awarded judgment against McDonald's and Watters for attorney's fees and costs.

McDonald's and Watters appeal the judgment of the trial court.

The first issue is whether the trial court erred by admitting and considering parol evidence to construe the written lease and amendment to lease.

The parol evidence rule provides that

prior conversations and negotiations, in the absence of ambiguity, merge into the final integrated writing. Parol evidence is not then admissible to contradict the terms of the instrument.

Heath Northwest, Inc. v. Peterson, 67 Wash.2d 582, 584, 408 P.2d 896 (1965); see Fleetham v. Schneekloth, 52 Wash.2d 176, 324 P.2d 429 (1958). Hence, parol or other extrinsic evidence is generally not admissible to add to, subtract from, vary or contradict written instruments which are contractual in nature and which are valid, complete, unambiguous, and are not affected by accident, fraud, or mistake. Pederson v. Peters, 6 Wash.App. 908, 910, 496 P.2d 970 (1972); Bond v. Wiegardt, 36 Wash.2d 41, 216 P.2d 196 (1950). However, the parol evidence rule should not be applied until the court has first determined as a matter of fact that the parties intended the written agreement to be a complete integration of the parties' agreement. Diel v. Beekman, 1 Wash.App. 874, 465 P.2d 212 (1970).

As noted in previous cases, confusion has resulted as to the proper application of the parol evidence rule in ascertaining the parties' intent in an agreement. Weyerhaeuser Co. v. Burlington Northern, Inc., 15 Wash.App. 314, 317, 549 P.2d 54 (1976); Lynch v. Higley, 8 Wash.App. 903, 510 P.2d 663 (1973); Eagle Ins. Co. v. Albright, 3 Wash.App. 256, 474 P.2d 920 (1970). Consequently, two lines of cases have developed regarding the admissibility of parol evidence to clarify a written agreement. See Shattuck, Contracts in Washington, 1937-1957: Part II, 34 Wash.L.Rev. 345, 374-77 (1959).

Some cases have held that a court may look beyond the four corners of a written instrument only if the instrument, on its face, is ambiguous. This is sometimes referred to as the "mechanical rule." Jacoby v. Grays Harbor Chair & Mfg. Co., 77 Wash.2d 911, 917, 468 P.2d 666 (1970); Poggi v. Tool Research & Eng'g Corp., 75 Wash.2d 356, 451 P.2d 296 (1969); Boeing Airplane Co. v. Firemen's Fund Indem. Co., 44 Wash.2d 488, 268 P.2d 654 (1954); North Am. Non Metallics, Ltd. v. Erickson, 24 Wash.App. 892, 896, 604 P.2d 999 (1979). Other cases have applied the "intent" test. Under the "intent" test, a court may examine parol evidence regarding circumstances surrounding the execution of a writing as an aid to its interpretation despite a lack of ambiguity on the face of the instrument. Tube-Art Display, Inc. v. Berg, 37 Wash.2d 1, 4, 221 P.2d 510 (1950); J.W. Seavey Hop Corp. v. Pollock, 20 Wash.2d 337, 349, 147 P.2d 310 (1944); Vance v. Ingram, 16 Wash.2d 399, 410-11, 133 P.2d 938 (1943); Spokane Helicopter Serv., Inc. v. Malone, 28 Wash.App. 377, 382, 623 P.2d 727 (1981).

In this case, we need not decide which test to apply. Washington case law indicates that the two tests have been applied in order to determine, "whether the parties intended the written document to be an integration of their mutual agreement." Weyerhaeuser v. Burlington Northern, 15 Wash.App. at 318, 549 P.2d 54; see Lynch v. Higley, supra. Here, there is no dispute that the 1969 lease and its amendment were fully integrated. The issue of integration was not before the trial court and is not before us on appeal. The sole question is whether the two instruments were ambiguous as to the number of easements that were reserved. If so, the trial court could properly have considered parol evidence to explain the ambiguity and to ascertain the intent of the parties. Levy v. North Am. Co. for Life and Health Ins., 90 Wash.2d 846, 852, 586 P.2d 845 (1978); Corinthian Corp. v. White & Bollard, Inc., 74 Wash.2d 50, 442 P.2d 950 (1968); Brower Co. v. Baker & Ford Co., 71 Wash.2d 860, 431 P.2d 595 (1967); Ladum v. Utility Cartage, Inc., 68 Wash.2d 109, 411 P.2d 868 (1966).

The 1969 lease, in an addendum, contained the following language:

Lessor reserves onto themselves or their assigns, for automobiles only, a twenty (20) foot wide exit and entrance for egress, ingress and access to and from Lessor's adjacent properties on the west and east boundaries of the leased premises and Lessee agrees that any barriers or obstructions to be placed on said exits or entrances shall not interfere with the free flow of traffic to and from said adjacent properties; and as the Lessor develops said adjacent properties there shall be reserved unto Lessee a common driveway over said...