Morris v. Woodside

• Decision Date: 14 June 1984
• Docket Number: No. 49776-1
• Citation: Morris v. Woodside, 101 Wn.2d 812, 682 P.2d 905 (Wash. 1984)
• Parties: Robert P. MORRIS, and Mary G. Morris, husband and wife, and the Marital community composed thereof, Appellants, v. Gordon WOODSIDE, Sherrill Slichter, Margaret Wallace and John Doe and Mary Doe, Respondents.
• Court: Washington Supreme Court

Page 812

101 Wn.2d 812

682 P.2d 905

Robert P. MORRIS, and Mary G. Morris, husband and wife, and the Marital community composed thereof, Appellants, v. Gordon WOODSIDE, Sherrill Slichter, Margaret Wallace and John Doe and Mary Doe, Respondents.

No. 49776-1.

Supreme Court of Washington En Banc.

June 14, 1984.

David F. Berger, Seattle, for appellants.

Jon Jonsson, Seattle, for respondent Woodside.

Ellington & Johansen, Helen Johansen, Ann Ellington, Seattle, for respondents Slichter, et al.

BRACHTENBACH, Justice.

Is the following real estate contract due-on-sale clause enforceable: "During the term of this Real Estate Contract between seller and purchasers. [sic] Purchasers agree not to sell said premises without paying off said Real Estate Contract."?

The facts: In 1978 plaintiff/appellant Morris, as purchaser, entered into a real estate contract with defendant/respondent Woodside, as seller, which contract contained the above clause. The contract concerned the sale of residential property on Vashon Island for a sum of $65,000.00. In 1980 Morris conveyed the property to defendants/respondents Slichter and Wallace for the sum of $125,000.00. Slichter and Wallace made a 25 percent downpayment, with the balance evidenced by a promissory note and secured by a deed of trust.

In the sale agreement between Morris and Slichter and Wallace, Morris agreed to maintain in good faith the underlying Woodside/Morris contract. However, Morris did not inform Slichter and Wallace that the underlying Woodside contract contained a due-on-sale clause. Morris also did not inform Woodside of the sale to Slichter and Wallace. Furthermore, without informing either Woodside or Slichter and Wallace of his intent to do so, Morris did not comply with the due-on-sale clause after the sale to Slichter and Wallace closed.

For the next 19 months all parties made timely payments under their respective agreements. Slichter and Wallace paid Morris $1000.00 per month on the promissory note while Morris paid Woodside $525.00 per month pursuant to their installment contract. When Woodside finally learned of the sale by Morris to Slichter and Wallace, and thus of Morris' noncompliance with the due-on-sale clause, he refused Morris' monthly payment for March, 1982 and served a "Notice of Intention to Declare a Forfeiture of and Cancel Contract" in April, 1982. This notice was also served upon Slichter and Wallace who, thereafter, made their monthly payments into a trust account and then the Registry of the Court.

Morris thereafter brought suit against Woodside and Slichter and Wallace. Morris sought declaratory relief that the due-on-sale clause was an unenforceable restraint on alienation, and that all instruments were otherwise valid and enforceable. Morris also sought foreclosure of the Slichter and Wallace deed of trust if declaratory relief was granted and Slichter and Wallace failed to bring their payments current.

Woodside counterclaimed against Morris for default under their real estate contract and cross claimed against Slichter and Wallace for "wrongful possession of real estate." Woodside sought to cancel the Morris/Slichter and Wallace contract and be put in full possession. Slichter and Wallace counterclaimed against both Morris and Woodside. They alleged, inter alia, that Morris had breached their contract; that Woodside should be restrained from foreclosing; and that they should be allowed to assume the Morris/Woodside obligation. All parties moved for attorney fees under their respective agreements.

After a 3-day trial, the court upheld the Woodside contract, finding as a matter of law that the due-on-sale clause was enforceable. The court found that Morris' failure to comply with that clause breached not only the Woodside contract but the Slichter and Wallace contract as well.

As an equitable remedy, the court entered an order restructuring the parties' agreements. It awarded Woodside all money paid into the court registry by Slichter and Wallace. It also directed Slichter and Wallace to pay directly to Woodside all monthly payments they owed to Morris under their promissory note until the balance of the underlying Morris/Woodside real estate contract was satisfied. All payments by Slichter and Wallace to Woodside, including the amounts previously deposited in the Registry of the Court, were to be credited against the Morris/Slichter and Wallace promissory note. After satisfying the Morris/Woodside obligation, Slichter and Wallace would resume paying directly to Morris. The court awarded Woodside, Slichter and Wallace attorney fees against Morris in the total amount of $16,706.25. We affirm.

Appellant makes 14 assignments of error which he asserts raise six issues. The findings of fact and conclusions of law to which error is assigned are not set out in the brief. This violates RAP 10.4(c). Compliance with this rule is essential to orderly appellate review. Prior to oral argument, the single set of Clerk's Papers is being studied by the assignment justice. Thus, as a practical matter, violation of RAP 10.4(c) denies the members of the Court, prior to oral argument, access to the very materials upon which appellant relies to assert errors.

Even more dispositive of most issues here is appellant's failure to provide a verbatim report of proceedings. The findings of fact are thus verities and binding upon this Court. Chace v. Kelsall, 72 Wash.2d 984, 987, 435 P.2d 643 (1967).

The trial court found as a matter of fact:

1. "There is no evidence of fraud, overreaching, or patent inequality of bargaining position in the Morris/Woodside Contract; the Contract was freely entered into between two private parties" 2. Morris negotiated in bad faith with Woodside prior to the sale to Slichter and Wallace;

3. Woodside neither waived the due-on-sale clause nor approved the sale to Slichter and Wallace;

4. "The sale of the realty by plaintiff Morris to defendants Slichter and Wallace did not threaten or endanger defendant Woodside's security but perhaps enhanced the security ...";

5. That Slichter and Wallace have complied substantially with their agreements with appellant, and that Morris failed to inform them of the due-on-sale clause of the Woodside contract at the time of their transaction;

6. That Morris breached his contract with Woodside;

7. That Morris breached his contract with Slichter and Wallace, and

8. "With respect to the Woodside/Morris due-on-sale clause the Court finds little, if any, 'quantum of restraint' as to the sale by Morris to Slichter and Wallace.... Said due-on-sale clause did not and would not have restrained the sale to Slichter and Wallace had plaintiff Morris elected to comply with the due-on-sale clause and to pay off Woodside's equity."

It is clear that most, if not all, of the above findings of fact are just that--resolution of disputed matters of evidence. As stated above, on this record, we must accept them as verities.

Although most of these...