McGary v. Westlake Investors

• Decision Date: 14 April 1983
• Docket Number: No. 48776-6,48776-6
• Court: Washington Supreme Court
• Parties: John A. McGARY, Stanton M. Cole and John S. Woodburne, d/b/a McGary, Woodburne & Cole, a partnership; Allen Lane Carr, Inc., P.S. and Allen Lane Carr, Petitioners, v. WESTLAKE INVESTORS, a limited partnership, Respondent.

Page 280

99 Wn.2d 280

661 P.2d 971

John A. McGARY, Stanton M. Cole and John S. Woodburne, d/b/a McGary, Woodburne & Cole, a partnership; Allen Lane Carr, Inc., P.S. and Allen Lane Carr, Petitioners, v. WESTLAKE INVESTORS, a limited partnership, Respondent.

No. 48776-6.

Supreme Court of Washington En Banc.

April 14, 1983.

Allen Carr, Edmonds, McGary, Cole, Bakun & Coolidge, John A. McGary, Seattle, for petitioners.

Siqueland & Holcomb, Herman S. Siqueland, Seattle, for respondent.

DORE, Justice.

This appeal involves the declaratory judgment action of Allen Lane Carr, Inc., P.S. and McGary, Woodburne and Cole, a partnership, against Westlake Investors, a limited partnership, to determine their rights under commercial leases they entered into with Westlake. The trial court entered judgment in favor of Westlake. Carr alone appeals, alleging errors in interpreting the lease renewal clause; the assessment of fees for lessee's parking spaces at the building; and attorney fees. The Court of Appeals affirmed the trial court, holding that Westlake was not barred from increasing rent for a 3-year renewal term; that Carr was not entitled to free parking; and that the trial court correctly awarded attorney fees. We affirm in part and reverse in part.

I

Beginning October 1, 1973, Westlake leased space in an office building to Carr and McGary for law offices. The Carr and McGary law firms shared space on one of the floors in the building and jointly negotiated their respective individual leases with Westlake. Carr's lease with Westlake contains the following clause:

If this lease be for a longer term than thirty-six months, the rental hereunder shall, at the end of thirty-six months ... be subject to rental adjustment by Lessor, as follows: If, whether because of increased operating costs of the premises or otherwise, Lessor should determine an increase of rental rate to be necessary, Lessor shall so notify Lessee by notice in writing addressed to Lessee at the premises and including a statement of the adjusted rental to apply, such notice to be given at least 90 days in advance of the expiration of the 36-month period as aforesaid, and to be effective on the first day of the rental month immediately following such 36-month period.

(1) If Lessee objects to such increased rental rate, ... then the revised rental rate shall be determined by a board of arbitrators ...

(Italics ours.) Clerk's Papers, at 58. At the place underlined, the word "sixty" was whited out and the figure "90" inserted. This change was not initialed by the parties on the lease as consummated.

The lease also provides that if the lessee objected to the increased rental, the rental would be settled by arbitration.

A further clause of the lease provides that:

The Lessor guarantees the Lessee the use of 2 executive parking stalls in the building parking lot.

Clerk's Papers, at 59. The figure "2" was typed into a blank.

The lease further provides in revised typed lease addendum 4 as follows:

7. The Lessee shall have the option to renew the lease for six (6) consecutive three year periods, provided lessee gives lessor written notice of their intention to exercise each such option not less than sixty (60) days prior to the expiration date of the lease or any extended period thereof; provided, however, that the monthly rental in the case of each such extension of the lease shall be at the rate to be negotiated between lessor and lessee, shall in no event be less than the monthly rental for the last month preceding such renewal period, and if the lessor and lessee are unable to agree as to the fair market rental value of the premises at the time of commencement of any such extension period, then the revised rental rate shall be determined by a board of arbitrators in accordance with the procedure provided above on page 1 of this lease.

Clerk's Papers, at 63-64.

In their testimony at trial, Carr and McGary gave the following account of the background of the renewal provision. Sometime prior to the execution of the original leases between the Carr and McGary firms and Westlake, the parties entered into different lease documents, signed by Carr, McGary and the partners of Westlake. The leases were negotiated by a real estate broker directly with the partners of Westlake who signed the leases as the lessor. The manager of the building was not available at the time of the consummation of the original Carr lease. Upon his return, he took exception to the terms of the leases and a dispute ensued, culminating in Westlake's disavowal of the lease agreements, pursuant to a letter written by counsel for Westlake.

Protracted negotiations were then commenced between the parties, and ultimately the lease documents with which we are now concerned were signed. The fundamental change between the initial lease and the present one was that the former was for an initial period of 5 years with additional options of 5 years. At the time of the negotiation of the new leases, Carr requested and was granted the right to change the terms of his lease from 5 years to 3 years. According to their testimony, Carr and McGary requested that the notice-of-rental-increase provision in both leases be changed to at least 90 days in advance rather than the 60 days provided for in the original lease. At the time the lease term began, Westlake did not charge any of its tenants for parking. In July 1974, Westlake began charging most of its tenants for parking but still did not charge Carr rental for his two parking stalls.

On July 30, 1976, approximately 60 days prior to the end of the lease, Carr gave notice that he wanted to exercise his option to renew. He was then informed there would be a rental increase. Discussions regarding the amount of the increase reached an impasse, at which point arbitration was pursued. An arbitration award was made, fixing the fair market rental value in the same amount as Westlake had previously requested. Carr paid the increased amount under protest, pending review of his legal contention that Westlake was not entitled to any rental increase because it had failed to give 90 days' notice of the proposed rental increase and, therefore, lessor waived its right to raise rentals for the first 3-year option agreement.

II

We initially address Westlake's contention that the issues presented on appeal are rendered moot by the lessor's recent unlawful detainer judgment against the lessee, which forfeited the Carr lease and forced him out of the leased premises. This analysis ignores the monetary stake Carr still has in this action. He recently was billed for more than $1,800 in parking rent and owes $4,600 in attorney fees. Obviously this case is not moot.

III

We next consider the issue of whether Westlake is barred from increasing rent for the 3-year term beginning October 1, 1976 because it failed to give lessee notice of a proposed rental increase at least 90 days prior to the end of the previous term. The 90-day-notice provision applies only if the fixed rental term is greater than 3 years.

We are not persuaded by Carr's contention that because the lease was really for longer than 3 years, the 90-day-notice provision applies. The trial court concluded in finding of fact 2.7 that:

The intent of the parties to the leases, as expressed in the plain and unambiguous provisions thereof, was that each lease was for a term of thirty-six months only, not longer, with multiple options for renewal under new leases, and not for extensions of the existing leases.

Clerk's Papers, at 18. A finding of fact supported by substantial evidence will not be disturbed by an appellate court. Thorndike v. Hesperian Orchards, Inc., 54 Wash.2d 570, 343 P.2d 183 (1959); McGovern v. Department of Social & Health Servs., 94 Wash.2d 448, 617 P.2d 434 (1980).

Carr maintains the lease language is ambiguous and the lease should be interpreted as being of longer than a 3-year duration. Generally, the question of whether a written instrument is ambiguous is a question of law for the court. Ladum v. Utility Cartage, Inc., 68 Wash.2d 109, 411 P.2d 868 (1966). An ambiguity will not be read into a contract where it can reasonably be avoided by...