Crown Plaza Corp. v. Synapse Software Systems, Inc.
| Decision Date | 25 August 1997 |
| Docket Number | No. 37868-6-I,37868-6-I |
| Citation | 962 P.2d 824,87 Wn.App. 495 |
| Parties | CROWN PLAZA CORPORATION, a Washington Corporation, Respondent, v. SYNAPSE SOFTWARE SYSTEMS, INC., Appellant. |
| Court | Washington Court of Appeals |
Andrew Guy, Bogle & Gates P.L.L.C., Seattle, for Appellants.
Matthew S. Elich, Nelson, Brinson & Elich, P.S., Bellingham, for Respondents.
Synapse Software Systems appeals from a summary judgment order in favor of its landlord, Crown Plaza Corporation. Because Synapse's vice president asserts that he entered into an oral agreement to terminate the lease, there is a genuine issue of material fact as to whether Synapse breached the lease when it attempted to vacate the premises or whether it was carrying out its obligations under the oral termination agreement. Related factual issues exist as to whether Synapse anticipatorily breached the lease and whether Crown Plaza constructively evicted Synapse. We reverse.
Synapse Software Systems leased commercial office space in a Bellingham office building from Crown Plaza Corporation. The 36-month lease began in February 1993. By January 1995, Synapse was having financial difficulties and had a poor lease payment history. Brad Yakubowich, Synapse's president, and Ken Combs, the manager of Synapse's Bellingham office, discussed closing the Bellingham office and subleasing the premises. Yakubowich claims that he advised Karin Hirsch, Crown Plaza's operations manager, of Synapse's intentions and that she told him not to worry about finding someone to sublease because Crown Plaza had a potential tenant.
According to Ken Combs, Synapse's office manager, he confirmed this arrangement by meeting with Ken Tiderington, Crown Plaza's vice president. Combs states that they reached a termination agreement. Under the agreement, Synapse would pay the January 1995 rent, which was already late at the time of the discussion, forfeit the deposit, either pay the February rent or leave a telephone system valued at over $6,000, and vacate the premises by February 3. Tiderington told Combs that he would need to get his partner's approval, but later informed him that his partner agreed. Consistent with this agreement, Crown Plaza began showing Synapse's space to potential tenants, including DIS, a tenant in another part of the Crown Plaza Building. Crown Plaza denies that any termination agreement was ever reached.
Synapse claims that Tiderington later asked for a letter stating that it intended to vacate the premises. Kevin Combs drafted a "Lease Agreement Termination," which set forth the terms of the oral agreement reached between Ken Combs and Tiderington. Tiderington said that the document was not what they wanted for purposes of obtaining a new tenant and instructed Kevin to prepare a shorter letter stating only that Synapse was moving out by January 31, 1995. Tiderington would then put the terms of the termination agreement on his letterhead.
On January 26, Synapse tendered a check for the January rent to Tiderington. According to Ken Combs, once Tiderington got the check, he changed his position on the termination agreement, stating that he had a new tenant for Synapse's space, but that the new tenant wanted two month's free rent. Combs told Tiderington that he would check with Yakubowich, but that he thought they would want to keep the original deal.
According to Synapse, its employees began packing for the move during the day on January 26. Crown Plaza contends that they did not pack during the day, but waited until the "darkness of night" to sneak away. In any event, Tiderington and his son physically prevented Synapse from removing the remainder of their belongings from the building and barred them from entering the premises. The next morning, Synapse claims, its equipment had been moved from the premises and the locks changed, although Synapse had paid rent through the end of the month.
Crown Plaza filed a complaint on January 27, alleging that Synapse had attempted to abandon the premises and was in default under the lease. At the same time, it obtained an ex parte writ of attachment of Synapse's personal property. After learning of this, Synapse revoked its earlier notice that it would vacate the premises, reasserting its possessory rights to the property. Crown Plaza did not allow Synapse to regain possession. Rather, it entered into a lease agreement with DIS, another tenant in the Crown Plaza Building, for Synapse's space. The lease began on April 1, 1995, but DIS was not required to pay rent until June.
Synapse's answer denied that it intended to abandon the lease, asserted that the parties had agreed to terminate the lease, and counterclaimed for wrongful attachment, violation of Washington's consumer protection act, conversion, constructive eviction, and intentional or negligent misrepresentation. The trial court granted Crown Plaza's motion for summary judgment.
Summary judgment is appropriate when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. CR 56(c). We review the summary judgment order de novo, considering the evidence in the light most favorable to the non-moving party. Kruse v. Hemp, 121 Wash.2d 715, 722, 853 P.2d 1373 (1993).
We must first determine whether a genuine issue of material fact exists as to whether the parties entered into an oral termination agreement. In his deposition, Ken Combs testified that he and Ken Tiderington reached an oral agreement that Synapse would pay rent for January and February, forfeit the deposit, and vacate in early February. Tiderington told Combs that he would need his partner's approval, but later informed him that his partner agreed. He also told him that they had other people interested in the space. Tiderington denies that he entered into a termination agreement and rhetorically questions whether a reasonable business person would agree to terminate a lease worth over $60,000 in exchange for $8,000.
Disputes over the existence of oral agreements are not appropriately decided on summary judgment. See Garbell v. Tall's Travel Shop, 17 Wash.App. 352, 354, 563 P.2d 211 (1977). As here, disputes about oral agreements depend a great deal on the credibility of the witnesses. Id. Crown Plaza argues that Synapse did not meet its burden of proving that there was "unequivocal mutual consent" to the agreement, which must be determined from the parties' outward manifestations. See Rorvig v. Douglas, 123 Wash.2d 854, 859, 873 P.2d 492 (1994). Crown Plaza contends that Synapse presented no evidence beyond mere allegations or assertions supporting the formation of an oral contract. Crown Plaza appears to confuse the concept of making a bare assertion (e.g., "there was an oral contract") with making a statement that, if believed by a factfinder, would support the legal contention. Here, Combs stated that he and Tiderington entered into an agreement and Tiderington denies it. Only a factfinder can determine which of these statements is more credible, considering all the evidence, including the unsigned written agreement and the reasonableness of the agreement. 1
Crown Plaza argues that, even if there was an oral agreement between the parties, it was not supported by sufficient consideration. "Consideration may consist of an act, a forbearance, the creation, modification or destruction of a legal relationship, or a return promise ...." Emberson v. Hartley, 52 Wash.App. 597, 601, 762 P.2d 364 (1988). An agreement to do that which one is already obligated to do does not constitute consideration to support a contract. Queen City Constr. v. City of Seattle, 3 Wash.2d 6, 17-18, 99 P.2d 407 (1940).
Synapse contends that the agreement with Crown Plaza was that it would pay the January rent, vacate the premises, forfeit the deposit, and either pay February rent or leave a $6,000 phone system. Crown Plaza contends that these acts could not constitute consideration because they were all preexisting duties under the lease. But the lease did not require Synapse to both pay February rent and vacate the premises so Crown Plaza could relet the space. Moreover, the reciprocal surrender of contractual rights constitutes consideration. Consolidated Electrical Distribs. v. Gier, 24 Wash.App. 671, 680, 602 P.2d 1206 (1979). Here, considering the facts in the light most favorable to Synapse, a jury could believe that Crown Plaza surrendered the right to collect the remainder of the rent in exchange for Synapse's surrender of its right to continue to occupy the building.
The doctrine of equitable estoppel is based on the idea that a party should not be allowed to disavow a representation made to another party if that party would be injured by its reliance on the representation. It requires three elements: (1) an admission, statement, or act inconsistent with the claim afterward asserted, (2) action...
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