Johnson v. Hansen
| Decision Date | 01 July 2003 |
| Docket Number | No. 28072-8-II.,28072-8-II. |
| Parties | ROBIN M. JOHNSON, Trustee of the William B. Johnson Testamentary Trust Appellant/Cross Respondent, v. ROGER A. HANSEN and PATRICIA M. HANSEN, husband and wife; and LEROY W. HANSEN and SONJA J. HANSEN, husband and wife, Respondents/Cross Appellants. |
| Court | Washington Court of Appeals |
Appeal from Superior Court of Pierce County, Docket No: 99-2-11443-0, Judgment or order under review, Date filed: 10/12/2001.
Laurason Taylor Hunt Attorney at Law Bellevue, WA, Counsel for Appellant(s).
James W. Feltus McGavick Graves PS Tacoma, WA, Counsel for Respondent(s).
UNPUBLISHED OPINION
The Trust of William Johnson, the grantee of property, sued the property grantor, alleging breach of contract, breach of statutory warranties, and misrepresentation. We affirm the judgment in favor of the grantor but remand for entry of an award of attorney fees on the breach of contract action.
In the 1970s, Hansen, Hansen & Johnson, a partnership composed of William Johnson, Roger Hansen, and Leroy Hansen (the Partnership), acquired land on Fryar Avenue in Sumner, Washington. The Partnership short-platted one parcel into four lots, constructed buildings on the lots, and sold a building and lot to Dr. Smith, one to Dr. Edlund, and, one to Dr. Tracy (the Dentists). The Dentists' lots were adjacent to an undeveloped one acre parcel (the Parcel) that the Partnership also owned. The partners and their employees, as well as the Dentists and their employees, parked on the Parcel. Roger Hansen testified that the partners told the Dentists that the Partnership `would accommodate them or try to accommodate them' in regard to parking when the Parcel was developed but that the partners made no specific promises to the Dentists. Report of Proceedings (RP) at 340.
Partner William Johnson died in 1991 and his widow, Cherry Johnson, served as personal representative of his Estate. To resolve a dispute with the remaining partners Roger Hansen and Leroy Hansen, and their wives, Patricia Hansen and Sonja Hansen, (the Hansens), she conveyed to them by statutory warranty deed the Estate's and her one third interest in the Parcel.1 But on June 14, 1996, as part of a final partnership settlement, the Hansens conveyed the entire Parcel by statutory warranty deed back to Cherry Johnson, individually and as personal representative of the Estate. The deed did not list any exceptions, but John Woodberry, Cherry Johnson's attorney, testified that it was subject to two recorded easements, not at issue here, and Cherry Johnson's deed of trust.
Before Cherry Johnson and the Hansens signed the settlement agreement,2 the Hansens expressed concern over its reference to a warranty against encumbrances.3 In response, Woodbery, wrote: `We are not concerned about the easements which encumber the property and your assumption that we are only concerned with liens is accurate.' Exhibit 36. According to Roger Hansen's later testimony, he understood this to mean that the term `encumbrances' in the settlement agreement meant only `free and clear of liens.' RP at 334.
Cherry Johnson transferred the Parcel to a testamentary trust created by Johnson's will (the Trust), which in turn listed the property with a real estate broker. The broker received a letter from attorney A. Eugene Hammermaster claiming that his clients, the Dentists, had easement rights for ingress, egress, and parking over and across the Parcel. The broker forwarded the letter to Woodbery and notified Cherry Johnson. Woodbery then demanded that the Hansens settle the Dentists' claims. After the Hansens refused to do so, the Trust sold the Parcel by statutory warranty deed to Investco Properties L.L.C. for $150,000. As part of the sale to Investco, the Trust agreed to settle the Dentists' claims and to `pay all expenses, costs, and fees including, without limitation, attorney fees and costs' related to the removal of title exceptions.4 Exhibit A to Exhibit 19. Investco agreed to pay $75,000 at closing and pay the remaining $75,000 within thirty days of removal of the title exceptions.
The Trust then brought an action in Investco's name against the Dentists to quiet title and for injunctive relief.5 The Dentists counterclaimed for an easement over the Parcel, asserting claims based on implied easement; easement by prescription; and easement by estoppel or part performance.6
Based upon Woodbery's advice, the Trust settled with the Dentists. Under the settlement agreement, the Dentists purchased the Parcel from Investco for $146,000, which in turn paid $51,529.17 to the Trust to settle the $75,000 balance owing on the Parcel. The Trust claims that it lost $23,470.83 in the sale and incurred legal fees and costs of $27,416.68 in resolving the Dentists' claims.
The Trust then filed this action against the Hansens, alleging breach of contract, misrepresentation, and breach of the warranty against encumbrances, the warranty of quiet possession, and the warranty to defend. After the conclusion of a three day trial, the Trust moved to amend its pleadings to conform to the evidence by adding a claim for breach of the warranty of seisin. The trial court initially denied the motion but, on reconsideration, allowed the amendment.
The trial court's findings state that the parties had agreed that the Hansens would transfer the Parcel free and clear of liens; that the Hansens did so; that the Trust failed to show that the Dentists had easement rights; and that the Trust failed to show that the Dentists' assertion of easement rights diminished the Parcel's value. The trial court concluded that the Hansens had not breached their statutory duty to defend because the Trust had not proven a breach of a statutory warranty. But the trial court denied the Hansens' motion for attorney fees, concluding that the fee provision in the settlement agreement merged into the deed. The Trust assigns error to numerous findings of fact, but it addresses only Findings 7, 9, 11, 16, 19, and 22,7 which provide as follows:
7. The parties exchanged a series of letters, proposed settlement agreements and had telephone conversations regarding the settlement. There were no telephone conversations regarding the Parcel between April 23 and May 15, 1996. The evidence disclosed that there were several telephone conversations between Mr. Woodbery and Mr. Lindquist {Hansens' attorney}, between May 15, 1996 and June 14, 1996. One conversation lasted for .8 of an hour. Taking into consideration the testimony at trial of John Woodbery and Roger Hansen, along with the correspondence dated May 1, May 2, May 3, and May 15, 1996, the Court finds that the parties agreed that the Parcel would be transferred from the Hansens to the Estate free and clear of liens, and that the term `encumbrance' in the Settlement Agreement meant the absence of liens, except liens in favor of Cherry Johnson and the Estate. The parties agreed to transfer the Parcel via a Statutory Warranty Deed.
9. It was reasonable for the Hansens to rely on the language of Paragraph 1 of the letter of May 15, indicating that the Estate and the Trust were only concerned with liens affecting the Parcel and that the Estate and the Trust were not concerned with other types of impediments or encumbrances to the Parcel.
11. The Hansens had a duty to transfer the Parcel free and clear of liens, other than liens in favor of Cherry Johnson and the Estate.
16. Plaintiff failed to show that the Dentists had easement rights to the Parcel.
19. There was evidence that historically the Dentists, their staff, and their customers or patients parked on the Parcel. This historic parking was permissive from its inception and was not intended to create an easement for parking on the Parcel.
22. There was a failure to produce sufficient credible evidence indicating that enforceable easement rights running with the land attached to the Parcel.
Clerk's Papers (CP) at 49-52. The Trust also argues that Conclusions of Law 1 through 3 and 5 through 7 are incorrect. Those conclusions provide as follows:
1. The Settlement Agreement, to the extent it involves a transfer of the Parcel to either the Estate or the Trust merged into the Statutory Warranty Deed executed by the Hansens and the Estate. As a matter of law, the Court concludes the warranties of the Statutory Warranty Deed would be limited to liens.
2. Plaintiff had the burden to show that the Dentists had enforceable easement rights by a preponderance of the evidence and that they were damaged as a result of a breach of the Statutory Warranty Deed. Plaintiff failed to show by a preponderance of the evidence that the Dentists had enforceable easement rights regarding the Parcel. Plaintiff failed to show that the value of the Parcel diminished even if the Dentists had enforceable easement rights. The historic parking, which took place on the Parcel, was permissive from its inception.
3. The discussion between the Dentists and the Hansens and Hansen, Hansen and Johnson regarding `accommodations' for the Dentists in the event the Parcel was developed did not create enforceable easement rights in favor of the Dentists.
5. The Hansens did not breach the duty to defend under the Statutory Warranty Deed because Plaintiff failed to establish a breach of a statutory warranty.
6. Plaintiff failed to show that its loss of approximately $23,000.00 attributable to its contract with Investco was proximately caused by a breach of a statutory warranty because Plaintiff failed to prove a breach of statutory warranty.
7. The Hansens are the prevailing party.
The Hansens challenge the denial of attorney fees in their cross appeal.
I. Liability under the Statutory Warranty Deed
The Trust argues that the evidence establishes the Hansens' breach of the warranties of seisin, against encumbrances, and of quiet enjoyment. The Trust contends that proof of breach is not dependent...
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