Burien Motors, Inc. v. Balch, 1540--I

• Court: Court of Appeals of Washington
• Writing for the Court: HOROWITZ; SWANSON, C.J., and FARRIS
• Citation: 513 P.2d 582,9 Wn.App. 573
• Parties: BURIEN MOTORS, INC., a Washington corporation, Respondent, v. Richard C. BALCH et al., Defendants, Robert V. Yeakel, Appellant, Jane Doe Yeakel, Defendant.
• Docket Number: No. 1540--I,1540--I
• Decision Date: 20 August 1973

Page 573

9 Wn.App. 573 513 P.2d 582 BURIEN MOTORS, INC., a Washington corporation, Respondent,
v.
Richard C. BALCH et al., Defendants,
Robert V. Yeakel, Appellant, Jane Doe Yeakel, Defendant. No. 1540--I. Court of Appeals of Washington, Division 1. Aug. 20, 1973.
Review Denied Jan. 24, 1974.

[513 P.2d 584]

Page 574

Krutch, Lindell, Donnelly, Dempcy & Lageschulte, Jerome R. Cronk, Seattle, for appellant.

Graham, McCord, Dunn, Moen, Johnston & Rosenquist, James D. Rolfe, Seattle, for respondent.

HOROWITZ, Judge.

The principal question raised concerns a real estate broker's liability for drafting lease assignment papers for a proposed lease assignee without disclosing to him the adverse zoning law status of the real estate or the broker's ignorance of that status.

Mr. Robert V. Yeakel, a real estate broker in the Burien area of King County, Washington, originally negotiated a 20-year lease of real property to be used for the sale of used cars--a commercial use within the meaning of the applicable zoning law. The broker, the owners, and Auto Lane, Inc., the lessee, knew the property would have to be rezoned from residential to commercial use to enable lessee to lawfully use the property for the purposes intended. The lease required the lessee to 'comply with each and all of the . . . ordinances of the County of King and City of Seattle now in force or hereafter enacted . . .' It also provided that '(t)his lease becomes null and void in the event the zoning of subject property is inconsistent with general commercial use.' The broker and Auto Lane, Inc. then undertook to have the property rezoned to commercial use. The Planning Commission office informed the broker and lessee that rezoning would be no problem. The broker thereupon turned over to the lessee's attorney the matter of obtaining the necessary rezoning. Without waiting for rezoning to be accomplished, the lessee proceeded to improve the property and conduct its used car business thereon.

About 4 months later, before rezoning was completed, Burien Motors, Inc., through its president Mr. Wagner, and lessee entered into negotiations to acquire lessee's leasehold interest. Burien believed lessee's use of the property was

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lawful. When Burien asked to read the lease to be assigned, lessee suggested that Burien contract Yeakel, explaining the latter was familiar[513 P.2d 585] with the property and had worked out the lease. Wagner knew Yeakel as a business and social friend. He conferred with Yeakel and read the lease. He asked Yeakel his opinion of the lease as an investment. Yeakel stated he thought it was 'a good deal.'

Wagner then asked Yeakel to prepare the necessary legal papers required to get the lease assigned to Burien. Yeakel had no license to practice law, but he agreed to prepare the papers involved. No fee was discussed, but Wagner testified he expected to pay Yeakel for his services. Wagner relied on Yeakel to advise Burien concerning the advisability of the transaction and the zoning status. Yeakel then drew an agreement dated August 30, 1968, a lease assignment called for in the agreement, and a bill of sale by the lessee to Burien of the lease improvements. Yeakel failed to check whether the rezoning to commercial use had been accomplished. He said nothing to Wagner concerning the zoning status of the property. Yeakel explained he believed the rezoning had been accomplished because the lessee had improved the premises and for some time had been using the premises for used car selling purposes. Burien completed the lease assignment transaction and paid the lessee $28,375. Burien went into possession and conducted its used car business on the leased property.

Several months later Yeakel learned the earlier zoning application to change the zoning status to commercial use had been denied. Yeakel did not inform Burien of that fact. Instead, he assisted the former lessee's attorney to file a second rezoning application. The second application was granted on condition that the property owners deed to the county a 30-foot right-of-way on the leased premises fronting upon a road. The owners executed the required deed. Neither they nor Yeakel informed Burien of the conveyance, and Burien remained unaware of any zoning problem involving the leased premises.

Subsequently, Burien was notified by the zoning authorities

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that its business operations on the entire leased premises was illegal. Burien notified Yeakel, who promised to take care of the matter. Later, Burien learned for the first time that the property owners had delivered a deed to the 30-foot right-of-way and, if it was to be able to lawfully use the property, Burien would be deprived of the legal right to use approximately 25 percent of the leased premises. Burien then rescinded the lease transaction and demanded...