Davis v. Rede Realty, Inc.

• Decision Date: 19 August 1985
• Docket Number: No. 12914-7-I,12914-7-I
• Citation: 41 Wn.App. 527,704 P.2d 1250
• Parties: Ronald E. DAVIS, Appellant, v. REDE REALTY, INC., a Washington corporation, Defendant, and Hoot Lowrimore and Nadine Lowrimore, husband and wife, d/b/a Success Roofing; and Mechanical Installers, Inc., a Washington corporation, Respondents.
• Court: Washington Court of Appeals

Page 527

41 Wn.App. 527

704 P.2d 1250

Ronald E. DAVIS, Appellant, v. REDE REALTY, INC., a Washington corporation, Defendant, and Hoot Lowrimore and Nadine Lowrimore, husband and wife, d/b/a

Success Roofing; and Mechanical Installers, Inc.,

a Washington corporation, Respondents.

No. 12914-7-I.

Court of Appeals of Washington,

Division 1.

Aug. 19, 1985.

Ruthford & Woodbery, John Woodbery, Kirkland, for appellant.

Lawrence J. Warren, Renton, for Lowrimore.

Jensen & Black, Stephen R. Black, Seattle, for Mechanical Installers.

SCHOLFIELD, Judge.

Ronald E. Davis appeals the denial of his motion for summary judgment and the grant of summary judgment to Hoot Lowrimore and Nadine Lowrimore, husband and wife, d/b/a Success Roofing (Lowrimore), and Mechanical Installers, Inc. (Mechanical). Rede Realty, Inc. is not a party to this appeal. We reverse.

FACTS

The parties do not disagree as to the critical facts. Davis sold the subject real estate by real estate contract dated August 24, 1979, to Upton Enterprises, Inc. (Upton). The contract was recorded in King County September 5, 1979. Lowrimore obtained a judgment against Upton on November 26, 1980. Mechanical obtained judgment against Upton on September 24, 1980. Neither Lowrimore nor Mechanical gave actual notice to Davis of its judgment against Upton. On March 1, 1982, Upton signed a "Relinquishment of Real Estate Contract", also signed by Davis, wherein Davis agreed Upton was released from all further liability under the contract, and Upton agreed the contract "has been abandoned and that all rights thereunder forfeited." This agreement was recorded March 9, 1982. It is conceded that Davis gave no notice of the relinquishment agreement to Lowrimore or Mechanical.

On October 13, 1982, Davis filed a complaint seeking to quiet his title to the subject property and naming Rede Realty, Inc., Lowrimore and Mechanical as defendants. All parties except Rede Realty, Inc., moved for summary judgment. The trial court denied Davis' motion and granted the

                motions of Lowrimore and Mechanical, holding that Davis' title was subject to their judgment liens.   The judgment gave Lowrimore and Mechanical the right to execute upon the subject property
                

NOTICE

Davis contends that a vendor and a vendee may enter into an agreed forfeiture of the vendee's rights under a real estate contract and thereby extinguish the rights of judgment creditors of the vendee without notice to the judgment creditors if the vendor has no actual knowledge of their judgments. We agree with Davis.

Kendrick v. Davis, 75 Wash.2d 456, 452 P.2d 222 (1969) is dispositive on the issue of notice. In Kendrick, the vendee defaulted and the vendor forfeited the vendee's interest in the contract by sending him a notice of intent to forfeit and then a declaration of forfeiture. In a subsequent quiet title action, two mortgagees asserted liens against the property. The court held that if the vendor had actual notice of the mortgagee's interest, "he would be required to recognize their interests and give them notice of any intent to forfeit the contract." Kendrick, at 461, 452 P.2d 222. There was no actual notice to the vendor of the mortgagee's interest, and the court held that the recording of the mortgages "did not give constructive notice of their existence to the vendor who was an antecedent party in the chain of title." Kendrick, at 464, 452 P.2d 222. In so holding, the Supreme Court expressly overruled Norlin v. Montgomery, 59 Wash.2d 268, 367 P.2d 621 (1961).

Davis asserts that he had no actual knowledge of the judgment liens of Lowrimore and Mechanical, and Lowrimore and Mechanical do not contend otherwise. Lowrimore and Mechanical were not entitled to notice of the agreed forfeiture.

Cascade Sec. Bank v. Butler, 88 Wash.2d 777, 567 P.2d 631 (1977)

Both judgment creditors and the trial court relied upon Cascade Sec. Bank. However, Cascade is readily distinguishable on its

                facts.   In Cascade, the vendee had a judgment entered against him some years after purchasing property by real estate contract.   He then conveyed his vendee's interest to a third party who, in turn, conveyed to a fourth party.   The court held that a vendee's interest in a real estate contract is "real estate" under the judgment lien statutes and that a vendee's interest is transferred to third parties subject to outstanding judgment liens.

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