Cowin v. Jacobson
| Decision Date | 02 May 2011 |
| Docket Number | NO. 64198-1-I,64198-1-I |
| Court | Washington Court of Appeals |
| Parties | WILLIAM C. COWIN and GEORGE CODDINGTON, Respondent, v. KEN JACOBSON and JANE DOE JACOBSON, husband and wife, Appellants. KEN JACOBSON, a single man, Appellant v. BCSCBN, INC., a Washington corporation; REBECCA NYBERG, wife of William C. Cowin; and KAY CODDINGTON, wife of George Coddington, Respondents. |
DIVISION ONE
UNPUBLISHED OPINION
Ken Jacobson, William Cowin, and George Coddington entered into a written agreement entitled "Vantage Bay Term Outline" (Term Outline) to develop a58-acre property in Vantage, Washington. After disputes arose over each party's respective rights and duties under the Term Outline, the parties sought a judicial determination of their rights, duties, and obligations. Jacobson also sought a money judgment for alleged payments due him under the Term Outline. After a four-day bench trial, the trial court filed extensive written findings of fact and conclusions of law, declaratory judgment, and supplemental judgment for $342,506.04 against Jacobson. Jacobson challenges the court's determinations related to (1) wrongful termination, (2) development cost and expense calculation, (3) exercise of first right of refusal, (4) Motel 6 promissory note, and (5) forced sale of Vantage Bay property. Finding no error, we affirm the judgments.
In 2005, Ken Jacobson and Joyce Palelek entered into a purchase and sale agreement (PSA) in which Palelek agreed to sell Jacobson a 58-acre property near the Columbia River in Vantage, Washington for $3 million. Jacobson sought to build about 300 homes on the property, but the project faced substantial obstacles, including water availability. The PSA required Jacobson to make a $1.5 million down payment and allowed him to seek financing for it. The PSA included an assignment provision that required Palelek's prior consent to assignment. The PSA also provided for several contingencies to allow Jacobson to start the development process and determine the project's feasibility.
Lacking the financial resources to purchase and develop the property, Jacobson sought out investors. Jacobson contacted William Cowin, who owned a drywallbusiness, and George Coddington, who had experience in planned development. During negotiations for what was later called the "Vantage Bay" development, Cowin agreed to loan Jacobson money for a separate Motel 6 property, secured by a deed of trust. Jacobson made several proposals seeking to retain control over Vantage Bay's direction. But because Cowin was providing all the development's financing, he insisted on total control and rejected Jacobson's proposed partnership agreement. After further negotiations, the parties signed the Term Outline.
According to the Term Outline, in exchange for assigning title to the property to Cowin's company, BCSCBN, Inc., Jacobson's to-be-formed entity would receive 33 percent of the development's profits, a $6,500 monthly fee, a leased vehicle, and a $400,000 loan to buy and develop the Motel 6 property. Jacobson would serve as a "Marketing/Sales consultant" and "work[] with Grant County PUD and other Public entities to obtain entitlements...." Coddington would serve as a "development consultant."
Cowin would "provide all the financing for the project" and had the right to terminate development "at any time Bill Cowin determines, in his sole discretion, the project is not financially viable." And In exchange for Cowin's sole discretion to terminate the project, Jacobson received a right of first refusal to buyback the property, if he paid the purchase price and development costs and repaid the Motel 6 loan.
The Term Outline also provided that "as drafted withe [sic] final agreement within the next 30 days."1 About six months after the parties signed the Term Outline, Cowin proposed a "consulting agreement" between himself and Jacobson, which Jacobson rejected.
The parties moved forward on entitlements2 and, at trial, disputed what each party accomplished. Jacobson testified he provided "momentum" for the project and important introductions to government officials. Report of Proceedings (RP) (July 16, 2009) at 23. Jacobson did some marketing work, but Cowin did not want to spend much advertising money early on in the project.
Cowin testified, "Mr. Coddington did 95 percent of the entitlements to get the preliminary plat approval." RP (July 14, 2009) at 186. He also testified, "I had contacted [Jacobson] on several occasions and during meetings that this wasn't come in and pick up your paycheck and go back and do nothing and come in and get your check again next month." RP (July 14, 2009) at 190-91. He also said, RP (July 14, 2009) at 191. Cowin also expressed frustration that Jacobson had notformed an entity— RP (July 14, 2009) at 193.
Coddington testified, RP (July 15, 2009) at 85. Coddington was then asked, "And following the preliminary plat approval and following the purchase of the property that closed on January 30, 2007, and then during the process of getting approval from various government entities, the water and the sewer, for instance, and other approvals, did Mr. Jacobson have any role in doing that work?" He responded, "No." RP (July 15, 2009) at 85. When asked what marketing work Jacobson had done, Coddington testified, "He worked on getting a website started, and he did fancy drawing of-real nice drawing of a Gaco (phonetic) plant, I think it's called." RP (July 15, 2009) at 86.
Cowin explained that Jacobson did not follow his instructions and he threatened to stop paying Jacobson's monthly fee unless he formed an entity as the Term Outline required. Eventually, Cowin stopped paying Jacobson's monthly fee and increased his monthly payments to Coddington. Shortly after Cowin stopped payments to Jacobson, Cowin and Coddington sued Jacobson in a declaratory action to determine their rights, duties, and obligations under the Term Outline. Jacobson countersued, seeking thesame relief and damages. Less than a month before trial, Cowin declared the project nonviable pursuant to the Term Outline.
Jacobson represented himself during the four-day bench trial.3 Cowin, Coddington, and Jacobson testified. Civil engineer Raymond Miller, attorney Jeff Slothower, attorney Mark Peterson, and Homestreet Bank assistant vice president James Owens also testified for Cowin and Coddington. Joyce Palelek testified for Jacobson. The court admitted over 100 exhibits and entered extensive written findings of fact and conclusions of law and a declaratory and supplemental judgment. Jacobson appeals.
When the trial court has weighed the evidence, we review the trial court's factual findings for substantial evidence to support them. We then determine whether the findings of fact support the conclusions of law and judgment. Brin v. Stutzman, 89 Wn. App. 809, 824, 951 P.2d 291 (1998)." 'Substantial evidence is evidence in sufficient quantum to persuade a fair-minded person of the truth of the declared premise.'" Brin, 89 Wn. App. at 824 (quoting Cowiche Canyon Conservancy v. Bosley, 118 Wn.2d 801, 819, 828 P.2d 549 (1992)). There is a presumption in favor of the trial court's findings, and the party claiming error has the burden of showing that a finding of fact is not supported by substantial evidence. Fisher Props., Inc. v. Arden-Mayfair, Inc., 115Wn.2d 364, 369, 798 P.2d 799 (1990). We defer to the trier of fact for purposes of resolving conflicting testimony and evaluating the persuasiveness of the evidence and credibility of the witnesses. Boeing Co. v. Heidy, 147 Wn.2d 78, 87, 51 P.3d 793 (2002). And an appellate court may not substitute its evaluation of the evidence for that made by the trier of fact. Goodman v. Boeing Co., 75 Wn. App. 60, 82-83, 877 P.2d 703 (1994). In determining the sufficiency of evidence, this court need only consider evidence favorable to the prevailing party. Bland v. Mentor, 63 Wn.2d 150, 155, 385 P.2d 727 (1963). We review legal issues de novo. Goodman v. Goodman, 128 Wn.2d 366, 373, 907 P.2d 290 (1995). Unchallenged findings of fact are verities on appeal. In re Estate of Jones, 152 Wn.2d 1, 8, 93 P.3d 147 (2004); see also RAP 10.3(g).
In September 2007, Cowin stopped paying Jacobson his $6,500 monthly fee, almost two years before he declared the project nonviable.4 Jacobson contends that his "relationship with BCSCBN was as an independent contractor" and "should be analogized to an employment relationship for purposes of determining BCSCBN's termination rights." Br. of Appellant at 22. Jacobson further argues that because he provided consideration (the property) in addition to his service, the for-cause exception to the at-will employment rule applies. Jacobson relies principally on Malarkey Asphalt Co. v. Wyborney, 62 Wn. App. 495, 814 P.2d 1219, 821 P.2d 1235 (1991). Jacobsonchallenges the court's finding of fact relating to the reasons why Cowin stopped paying him:
From April 2006 through August 2007, BCSCBN, Inc. made fee payments of $6,500 per month to Jacobson...
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