Kofmehl v. Baseline Lake, LLC

Decision Date12 April 2012
Docket NumberNo. 29683–1–III.,29683–1–III.
Citation275 P.3d 328
CourtWashington Court of Appeals
PartiesPatrick H. KOFMEHL, an individual, Respondent, v. BASELINE LAKE, LLC, a Washington limited liability company, Appellant.

275 P.3d 328

Patrick H. KOFMEHL, an individual, Respondent,
v.
BASELINE LAKE, LLC, a Washington limited liability company, Appellant.

No. 29683–1–III.

Court of Appeals of Washington, Division 3.

April 12, 2012.


[275 P.3d 329]

George M. Ahrend, Ahrend Law Firm PLLC, Moses Lake, WA, for Appellant.

Michael R. Tucker, Dunn & Black PS, Spokane, WA, for Respondent.

OPINION PUBLISHED IN PART
SIDDOWAY, A.C.J.

¶ 1 When a purchase and sale agreement is determined to be void under the statute of frauds, the court may grant rescission and award restitution, restoring the parties to

[275 P.3d 330]

their precontractual positions. But a purchaser who relies on the statute of frauds to avoid the contract may not obtain restitution if the vendor is ready, willing, and able to perform as agreed. Home Realty Lynnwood, Inc. v. Walsh, 146 Wash.App. 231, 240, 189 P.3d 253 (2008). This appeal requires that we address an issue not explicitly addressed in prior cases applying this rule, namely, who bears the burden of proof of establishing whether the vendor is ready, willing, and able to perform? We hold that establishing that the vendor was not ready, willing, and able to perform is an essential part of the vendee's proof of a right to restitution. Because the trial court erred in imposing the burden on the vendor, we reverse its orders granting summary judgment and attorney fees to Patrick Kofmehl and remand the case for further proceedings.

FACTS AND PROCEDURAL BACKGROUND

¶ 2 At issue in this case is a portion of a parcel of real property now located in Quincy, Washington, following its annexation in 2007. The full parcel consists of approximately 43 acres described as farm unit (FU) 182, block 73, in Grant County. In January 2007, Baseline Lake LLC, the owner of the property, entered into a listing agreement to sell up to 30.12 acres, for which its asking price was $1.6 million. In listing the property it indicated its willingness to sell the 30.12 acres in smaller parcels of 17.40 acres and 12.72 acres at prorated prices. It withheld the remaining 13 acres from the listing, intending to build a private school on a 3.93–acre parcel in the northwest corner. It had no immediate plans for the south 9.04 acres of the property, which is subject to an easement for an irrigation canal.

¶ 3 Patrick Kofmehl was one of the parties interested in the listed property; he hoped to acquire it for residential development. Before entering into the agreement that is the subject matter of this dispute, Mr. Kofmehl and his broker, Michael Nicholson, were provided with a survey map that depicted the entire 43 acres owned by Baseline. The survey, to which Mr. Nicholson added the highlighted border, depicted the portions of FU 182 as follows;

Image 1 (4.19" X 3.34") Available for Offline Print

Clerk's Papers (CP) at 107.

¶ 4 On March 9, 2007, Mr. Kofmehl executed a proposed real estate purchase and sale agreement by which he offered Baseline $1.5 million for property that his proposed purchase and sale agreement described as follows:

[275 P.3d 331]

This Agreement covers the following described real estate in the City of Quincy, County of Grant, Washington; commonly known as Approximately 30.12 acres of vacant land situated between 10th Avenue & 13th and legally described as follows: all inside and a part of FU 182, Block 73, Columbia Basin Project, Grant County Tax Parcel number 20–0838–000.

CP at 84 (parentheticals omitted). The March 2007 proposed purchase and sale agreement stated that the offer was subject to the following terms and conditions:

1. Review & approval of the property and [its] lot lines by the purchaser within two weeks of acceptance of this offer by the seller.

2. Final annexation into the City of Quincy by the City of Quincy.

3. Seller agrees to pay to purchaser “late comer fees” of $29,475.00 to the purchase if seller chooses to develop the 3.93 acres he has excluded from the overall parcel number shown above.

5 [sic]. If seller decides not to develop the 3.93 acres he will give this purchaser a 45–day (after seller decides not to develop the 3.93 acres) right of first refusal on that land at a price equal to what the purchaser is paying per square foot for the 30.12 acres included in this offer.

Id. The offer was not accepted. Given market conditions at the time and competing offers for the property, Baseline amended its listing agreement on March 20, 2007 to increase the asking price to $1.65 million.

¶ 5 After further offers, Mr. Kofmehl and Baseline entered into a purchase and sale agreement on April 17, 2007 (the Agreement), by which Mr. Kofmehl agreed to purchase the property at the asking price of $1.65 million. The Agreement was prepared for the most part by Mr. Kofmehl's broker, Mr. Nicholson, who added typewritten terms to a form real estate purchase and sale agreement. Mr. Kofmehl added one handwritten condition of his own before the Agreement was presented to and accepted by Baseline.

¶ 6 The provision of the Agreement describing the real estate covered by the Agreement was not identical to the description of the real estate covered by the March 7 purchase and sale proposal. Instead of speaking of 30.12 acres “ all inside and a part of FU 182, Block 73 ” it described the property as follows;

Approximately 30.12 acres of vacant land situated between 10th Avenue and 13th and legally described as follows; All included inside of FU 182, Block 73, Columbia Basin Project, Grant CO Tax Parcel # 20–0838–000.

CP at 75. The terms and conditions of the March 7 purchase and sale proposal dealing with the 3.93 acres in the northwest corner (addressing Baseline's future development or decision not to develop that parcel) were dropped.

¶ 7 In addition to including the property description, Mr. Nicholson added the following typewritten terms and conditions to the Agreement:

$50,000.00 Earnest money as shown above in the form of a check to be deposited with [Baseline's broker's] Trust Account upon mutual acceptance of this agreement. Said Earnest money to become non-refundable upon Final annexation of this property into the City of Quincy, Washington and is to be released to the seller at that time.

$1,600,000.00 Additional cash at closing.

¶ 8 Offer to purchase subject to the following terms and conditions:

1. Purchaser receiving preliminary plat approval from the City of Quincy.

2. Purchaser closing this sale within five business days after preliminary plat approval from the City of Quincy.

3. Both purchaser & seller may participate in a 1031 exchange at no cost to the nonparticipating party.

Id. Mr. Kofmehl added the following handwritten paragraph to the terms and conditions included by his broker:

4. Accessibility of City sewer.

Id.

¶ 9 Baseline obtained annexation and preliminary approval of its short plat within a month after the Agreement was signed. On

[275 P.3d 332]

May 8, 2007, Baseline's broker, Curt Morris, faxed confirmation of annexation and preliminary approval to Mr. Nicholson as support for release of the $50,000 earnest money. Mr. Morris's transmittal of the proposed short plat stated:

DONE!

Let's go to phase II.

I shall have the letter from the City this week satisfying item # 4. Earnest money to be deposited May 9th. I'll get title report coming.

Any help I can give in regards to this plat let me know but it should be all engineering from now.

CP at 352. The proposed short plat forwarded to Mr. Nicholson identified the 30.12 acres depicted on the earlier-provided survey map as 12.72–acre and 17.40–acre parcels as a unitary “Lot 1.” CP at 353. The excluded northwest 3.93 acres and southern 9.07 acres were now depicted as “Lot 2” and “Lot 3,” respectively. Id. Other than those revised identifications, the depiction of the northwest 3.93 acres, the southern 9.07 acres, and the 30.12 acres offered for sale was virtually identical, if not identical, to the survey map originally provided.

¶ 10 In light of the annexation, Mr. Morris released the earnest money deposit to Baseline on May 9 as advised in his May 8 transmittal. Mr. Kofmehl raised no objection at that time.

¶ 11 Also on May 9, 2007, the mayor of Quincy provided Mr. Morris with a letter referencing “Sewer Availability,” which stated:

In response to your question this morning, May 9, 2007, you asked about the availability of sewer for the property recently annexed to the City and referred to as Baseline Lake, LLC Annexation lying east of County Road R NW and south of Lauzier Park. This property could be served either north or east subject to engineering.

The City would be happy to assist a developer in planning of sewer service to this Property. If you have any other concerns please contact the City.

CP at 334.

¶ 12 The Agreement included a closing date of April 15, 2008, almost a year out. On April 13 or 14, 2008, the parties extended the closing date by 45 days. Their addendum carried forward the description of the property contained in the Agreement and stated:

Both parties to this agreement hereby agree to extend the closing date to June 1, 2008 (45 days) so that they can complete the negotiations regarding sewer & water cost sharing and any other negotiations regarding the 3.93 acres that the seller wants to build a private school on.

CP at 78. Baseline alleges that the “negotiations” referred to by the addendum were with a view to Mr. Kofmehl purchasing Lot 2 in addition to Lot 1, or, if not, to possible cost-sharing by the parties in bringing water and sewer to their respective properties. The closing date was extended again, to July 1, 2008, by a second addendum entered into in late May 2008. The description of the property in the second addendum, including the prefatory language, “[a]pproximately 30.12 acres of vacant land,” remained unchanged.

¶ 13 By a date at least several months earlier, in late January 2008, Mr. Nicholson's communications with Mr. Kofmehl reveal that they foresaw the possibility of a legal dispute over sewer accessibility and the...

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    • United States
    • Vermont Supreme Court
    • September 6, 2013
    ...element of the unjust enrichment claim, the burden to prove that fact must lie with the vendee. See Kofmehl v. Baseline Lake, LLC, 167 Wash.App. 677, 275 P.3d 328, 337 (2012) (stating that because “[e]stablishing that [the vendor] was not ready, willing, and able to perform as agreed is a n......
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    • June 20, 2013
    ...the Court of Appeals. The Court of Appeals took review and subsequently issued a partially published opinion, Kofmehl v. Baseline Lake, LLC, 167 Wash.App. 677, 275 P.3d 328 (2012). ¶ 15 The Court of Appeals affirmed the trial court's holding that the Agreement fell afoul of the statute of f......
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